Clifford Chance

A Year on From Stoyas: Non-US Issuers Face Heightened Risk of US Securities Litigation

April 15, 2021

Last year, a US federal court in California held that foreign issuers with unsponsored American Depository Receipts traded in the United States can be liable under the US securities laws for misstatements that are made abroad. This decision opened the door for plaintiffs to bring lawsuits against these issuers even though they were not involved in the formation of the ADR facility. The decision theoretically could also extend to so-called "F Shares" that may be even further removed from the issuer's control. Unsurprisingly, emboldened plaintiffs have filed a string of such claims against foreign issuers.

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