- Kevin LaCroix, Court Holds U.S. Securities Laws Apply to OTC Transactions in Volkswagen’s Sponsored ADRs
These issues arose again the U.S. securities class action lawsuit that Volkswagen ADR investors filed against the company and related defendants based on allegations involving the company’s recent high-profile vehicle emissions scandal. The Volkswagen defendants argued in reliance on Morrison that the U.S. securities laws do not apply to the OTC transactions in the company’s ADRs. In an interesting January 4, 2017 opinion (here), Northern District of California Judge Charles R. Breyer held that the U.S. securities laws do indeed apply to over-the-counter transactions in the U.S. of Volkswagen’s sponsored Level 1 ADRs.
- Davis Polk & Wardwell LLP, VW Ruling – Morrison Not A Bar To Securities Claims Involving ADRs