The court requests that the parties address the following seven questions in the briefs:Under which federal statutes, if any, may the court have jurisdiction?What specific liability, duty, rule, or regulation created by the Exchange Act, if any, does the petition seek to enforce that would create exclusive jurisdiction in the federal court under 15 U.S.C. §78aa?Does §78aa extend exclusive jurisdiction to suits to enforce liabilities or duties created by FINRA Rules?Does the complaint properly invoke federal question jurisdiction under 28 U.S.C. §1331?Alternatively, does the complaint entail federal issues necessarily raised, actually disputed, substantial, and capable of resolution in federal court so as to create jurisdiction under 28 U.S.C. §1331?Are there any other potential bases for federal jurisdiction?Assuming jurisdiction exists, what standards should the court apply in considering the petition?

In addition to his state-law claims, Manning suggested in his Complaint that Merrill Lynch’s conduct also violated Regulation SHO. Merrill Lynch removed the case to federal court, arguing that the federal court had jurisdiction of Manning’s claims because: (1) they “arose under” federal law under 28 U.S.C. § 1331; and (2) Manning’s lawsuit was “brought to enforce any liability or duty created by [the Act] or the rules and regulations thereunder,” and therefore fell within the exclusive-jurisdiction provision of section 27 of the Exchange Act (15 U.S.C. § 78aa(a)). Manning moved to remand the case back to state court, but the district court denied his motion.

der the Securities Exchange Act of 1934. As originally enacted, however, Section 15401 was based on Section 12(a)(2) of the Securities Act of 1933.Several years ago when the California legislature amended Section 25401 to mirror Rule 10b-5 more closely, I posed the question of whether California had effectively closed the state courthouse door to securities fraud suits because of the federal courts' exclusive jurisdiction over claims under the Securities Exchange Act of 1934. That question became less acute when the legislature reverted Section 25401 to its original form. Nonetheless, Section 25401 remains similar to Rule 10b-5(b).Recently, the defendants in a securities lawsuit attempted to remove the suit to federal court in part on this basis:Defendants contend that Plaintiff “also alleges what would be actionable under [the Exchange Act], which establishes exclusive federal jurisdiction over claims brought under the Act, and therefore compels removal.” Id. at 6 (emphasis omitted); 15 U.S.C. § 78aa(a).1791 Mgmt., LP, v. Energy Vault, Inc., 2024 WL 245625, at *7 (C.D. Cal. Jan. 22, 2024). Judge André Birotte Jr. did not bite, however, because the plaintiffs were not seeking to enforce any provision of the Exchange Act or the rules thereunder and federal law was not required to resolve the plaintiffs' claims.[View source.]

spects of the purported derivative Section 14(a) claim.ConclusionDelaware corporations use exclusive forum selection clauses as a means of managing litigation, including by preventing forum shopping and minimizing the costs and uncertainty of multi-forum litigation. Corporations may also specifically prefer that cases be heard in Delaware, given its well-developed body of case law and expertise in resolving corporate law disputes. The en banc grant may provide greater clarity as to the scope of these clauses and whether they can be enforced against federal derivative securities claims.[1]The case is Lee v. Fisher et al., No. 21-15923. The petition is available at: https://fingfx.thomsonreuters.com/gfx/legaldocs/movakmljjva/frankel-gapderivative—enbancpetition.pdf.[2]Section 27(a) provides federal courts with exclusive jurisdiction over “all suits in equity and actions at law brought to enforce any liability or duty created by [the Exchange Act] or the rules or regulations thereunder.” 15 U.S.C. § 78aa(a). Section 29(a) renders void “[a]ny condition, stipulation, or provision binding any person to waive compliance with any provision of [the Exchange Act] or of any rule or regulation thereunder.” 15 U.S.C. § 78cc(a).[3]The response to the petition is available at: https://fingfx.thomsonreuters.com/gfx/legaldocs/zdvxdynrnvx/frankel-gapderivative—enbancopposition.pdf.[View source.]

In contrast, any securities fraud charge would probably not have been proper in New York, as venue would be appropriate only where an act or transaction comprising the substantive violation occurred. See United States v. Lange, 834 F.3d 58, 68-71 (2d Cir. 2016) (citing 15 U.S.C. § 78aa(a)).Nevertheless, it’s not clear why the DOJ brought the case in New York when the core facts involved actions of two co-conspirators in Seattle. This may reflect a policy decision to signal serious determination in policing crypto asset markets by the DOJ.

Extraordinary circumstances could arise, for example, if enforcement of the clause “would contravene a strong public policy of the forum in which suit is brought, whether declared by statute or by judicial decision.”The court then rejected plaintiff’s argument that enforcement of the clause at issue was contrary to clear public policy expressed by (i) the anti-waiver provision in the Exchange Act, 15 U.S.C. Section 78cc(a); (ii) the Exchange Act’s exclusive federal jurisdiction provision, 15 U.S.C. Section 78aa; (iii) Delaware state case law; and (iv) a federal court’s general obligation to hear cases within its jurisdiction.Plaintiff’s anti-waiver provision argument failed because “the strong federal policy in favor of enforcing forum-selection clauses . . . supersede[s] antiwaiver provisions in state statutes as well as federal statutes, regardless of whether the clause points to a state court, a foreign court, or another federal court.”

15 The panel consisted of Circuit Judges Diane P. Wood, David F. Hamilton, and Frank H. Easterbrook.16Seafarers, 23 F.4th at 720 (quoting 8 Del. C. § 115).17 Id. (quoting S.B. 75, 148th Gen. Assemb., Reg. Sess. (Del. 2015) (synopsis)).18Id. at 720.19Id. at 719 (citing 15 U.S.C. § 78aa).20Id. at 720 (citing 15 U.S.C. § 78cc(a)).21Id.22 Id.

Cavello Bay, 986 F.3d at 165-66 (citation omitted). 15 U.S.C. § 77v(c); 15 U.S.C. § 78aa(b); see SEC v. Traffic Monsoon, LLC, 245 F. Supp. 3d 1275, 1294 n.10 (D. Utah 2017).See Mason v. Continental Grp., Inc., 474 U.S. 1087, 1087-88 (1986) (White, J., dissenting) (because circuit differences in rules “may have the troubling effect of encouraging forum shopping by plaintiffs,” the “conflict among the Circuits . . . can hardly be passed over as an unimportant one unworthy of this Court’s attention”).

[25] For convenience, we use the term enforcement action to refer to any SEC lawsuit, whether executed as a legal action in the appropriate United States district court or as an administrative proceeding before an SEC administrative law judge. Federal courts have jurisdiction over violations of the federal securities laws under 15 U.S.C. § 77v(a), 15 U.S.C. § 78aa, and 28 U.S.C. § 1331.[26] “Standalone PDM” is a financial product that functions only or will function only as private money; it has a currency-only function. We discuss its purported function as an investment below.[27] Non-monetary digital assets that are simply perceived as “investments.”

8SeeTellabs Inc. v. Makor Issues & Rights Ltd., 551 U.S. 308, 127 S.Ct. 2499, 2508 (2007).9See 15 U.S.C. § 77z-1(a)(1) (providing for private securities class action reforms brought pursuant to the Federal Rules of Civil Procedure).10 15 U.S.C. § 78aa(a).11 15 U.S.C. § 77z-1(a)(3)(B).