NAB up against US Supreme Court
(2 December 2009 – USA) The US Supreme Court will decide whether Australian stockholders can sue, Melbourne based, National Australia Bank (NAB) using U.S. securities law and the American court system.
The Supreme Court has said that the landmark fraud case, brought by shareholders, will be used to clarify whether and when US law can apply to international dealings in the future.
In the case, that was previously thrown out by a lower court for the fraud being a to ‘tenuous’ connection to the USA, investors claim that HomeSide Lending Inc., which NAB has now sold, fraudulently overvalued its assets.
NAB later reduced the value of it assets by US$2.2 billion (A$2.39 billion) due to a mistake in valuation made by HomeSide.
As a result the bank’s stock price dropped sharply.
The investors claim that American courts should have jurisdiction to hear their lawsuit because the alleged fraud was committed in the United States.
The high court has agreed to hear the case which will be argued in March or April 2010.
In the case, that was previously thrown out by a lower court for the fraud being a to ‘tenuous’ connection to the USA, investors claim that HomeSide Lending Inc., which NAB has now sold, fraudulently overvalued its assets.
NAB later reduced the value of it assets by US$2.2 billion (A$2.39 billion) due to a mistake in valuation made by HomeSide.
As a result the bank’s stock price dropped sharply.
The investors claim that American courts should have jurisdiction to hear their lawsuit because the alleged fraud was committed in the United States.
The high court has agreed to hear the case which will be argued in March or April 2010.
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