High Court to Hear ‘Profoundly Important Question’ on Reach of Securities Laws

The U.S. Supreme Court has agreed to decide the reach of the nation’s securities laws in a shareholder suit against National Australia Bank Ltd.

A federal appeals court based in New York City had ruled U.S. courts had no jurisdiction to hear the suit by Australian shareholders, Bloomberg reports. The suit claims a Florida-based mortgage subsidiary of the bank had overvalued its assets, causing $2.2 billion in writedowns.

The reach of U.S. securities fraud laws has “deeply divided” the federal courts, according to SCOTUSblog.

Georgetown University Law Center professor Donald Langevoort told Bloomberg the issue has been closely watched—for some time. “People have been waiting for the court to take on this question for more than 30 years,” he said. “It’s amazing that it’s taken the court so long to reach such a profoundly important question.”

The case is Morrison v. National Australia Bank.