What Counts as a Domestic Transaction Anymore: The Second Circuit and Other Lower Courts\u27 Struggles in Interpreting the Supreme Court\u27s Intent in Morrison v. National Australia Bank When Dealing with Derivative Securities Transactions

The U.S. Supreme Court recently created uncertainty in the over-the-counter derivative securities market with its decision in Morrison v. National Australia Bank Ltd. Courts used to determine if claims involving fraudulent actions effecting securities transaction could be made under U.S. securities law by assessing whether the fraud was conducted or the effects of the fraud was felt within the United States, but after Morrison that changed. Now, a securities transaction must be made on a “domestic exchange” or be a transaction occurring within the United States. The Supreme Court did not thoroughly define what constitutes a “transaction occurring within the United States” and now lower courts are struggling to interpret the Supreme Court’s intent when applying the Morrison test to derivative transactions cases