Securities Law Commons^™

The International Reach Of Rule 10b-5: The Myth Of Congressional Silence, Margaret V. Sachs

Scholarly Works

This article challenges the conventional wisdom that in adjudicating the international reach of rule 10b-5 courts begin with a blank legislative slate. The history of the securities laws demonstrates that this conventional wisdom is erroneous in two important respects. First, the securities markets of the 1920's were highly international, as Congress was well aware when it enacted the 1933 and 1934 Acts. Second, Congress nevertheless chose to protect only those investors whose trades occur inside the United States-“domestic traders” -- regardless of whether the securities traded are domestic or foreign. As a result, foreign traders lack standing to sue under …