Why a Manhattan Court Erred in Magyar Telekom Jurisdiction Ruling

GIR Just Anti-Corruption

03.03.2017

In this article, Amelia Hairston-Porter* and Laura Ferguson discuss SEC v. Straub, a September 2016 Foreign Corrupt Practices Act (FCPA) civil enforcement action. The court's assertion of personal jurisdiction over two of the three defendants in the matter marks a departure from existing personal jurisdictional case law, and the court's expansive view of the minimum contract test puts foreign executives at risk for litigation stemming from everyday business activities, Hairston-Porter and Ferguson wrote. With this ruling, "the federal district court engaged in an overly expansive approach to personal jurisdiction, raising new questions about the scope of the SEC's [Security and Exchange Commission's] reach over individual foreign defendants whose allegedly illegal conduct occurred wholly outside the U.S.," the authors said. "Those counselling foreign executives should therefore be mindful of the unintentionally chilling effect this may have on the willingness of foreign executives to participate in the day-to-day running of the business." 

*Former Miller & Chevalier attorney