Continental Grain (Australia) Pty. Ltd. v.Pacific Oilseeds, Inc.: An Unjustifiable Expansion of Subject Matter Jurisdiction in a Transnational Securities Fraud Case

Marovitch, Joseph A. | January 1, 1980

This note will suggest that the holding in Continental Grain repre- sents an unjustifiably expansive application of the conduct test. Recog- nizing the Second Circuit’s expertise in the securities law area, this note will critically examine the case of that circuit, concluding that the Sec- ond Circuit would not have found jurisdiction under the conduct test on the facts of Continental Grain.’ Next, SEC v. Kasser,8 a Third Cir- cuit case relied upon by the court in Continental Grain, will be criticized as an unwarranted expansion of the conduct test. Unwarranted or not, Kasser also could have been distinguished on a number of grounds.9 Finally, a critical analysis will be made of the policies relied upon by the court in Continental Grain.”