The Second Circuit's Absolute Activist test, locating a transaction where title transfers or irrevocable liability is incurred, is easy to manipulate: parties can arrange for irrevocable liability to arise outside the United States, for example by conditioning liability on approval by an agent located abroad.
Source quote, verbatim
this test is easy to ma- nipulate by agreeing that one or both parties will take steps to create irrevocable liability outside the United States, for exam- ple, by making liability on the transaction contingent upon ap- proval of the transaction by an agent located outside the United States.
From
Wulf A. Kaal, Richard W. Painter, Forum Competition and Choice of Law Competition in Securities Law after Morrison v. National Austral (2012), III.A. Challenges for a Transaction Test Rooted in Geography, p. 63 https://ssrn.com/abstract=2029983 · source PDF
Cite as
Wulf A. Kaal, Richard W. Painter, Forum Competition and Choice of Law Competition in Securities Law after Morrison v. National Austral (2012). SSRN: https://ssrn.com/abstract=2029983
Holds when
private securities transactions off organized exchanges
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