# kaal:claim:2029983-032

**Claim.** 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.

**Type.** failure  **Support.** argued

**Holds when.**

- private securities transactions off organized exchanges

**Source quote.**

> 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, page 63

**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

**Verify.** sha256 of source PDF `fde2ff611420eb283cbb49a6b681a2ae8efa2b4603ae71480e2d91483f0295f2` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20and%20Painter%20-%202012%20-%20Forum%20Competition%20and%20Choice%20of%20Law%20Competition%20in%20Securities%20Law%20after%20Morrison%20v.%20National%20Austral.pdf

**Failure mode.** manipulable-transaction-location  (family: regulatory-arbitrage)

**Topics.** law-and-legal-systems

**Keywords.** absolute-activist, transactional-test, manipulation, irrevocable-liability

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