What is the Fact, Issues, Rules, Analysis, Conclusion for this case???

The National Australia Bank Limited (National or Bank) is the largest bank in Australia.Its common shares are traded on the Australian Stock Exchange and other foreign securities exchanges, but this stock is not listed for sale on any exchange in the United States. What is listed on the New York Stock Exchange is the national's American Depositary Receipts (ADRs). An ADR represents the right to receive specified shares of a foreign stock.

In February 1998, National purchased a Florida corporation known as HomeSideLending Inc. In essence, HomeSide earned profits by collecting mortgage payments. Any early price of mortgages reduced HomeSide 's earnings as it reduced its income stream.

National announced it was writing down the value of HomeSide 's assets by $450million in July 200l and by another $1.75 billion in September 2001. The reason for these adjustments was low-interest rates causing many borrowers to refinance existing mortgages. The early payoff due to the refinanced mortgages hurtHomeSide 's income.

A group of Australian investors filed a complaint in the U.S. District Court for the Southern District of New York alleging that the officers of National and HomeSideviolated Section l0(b) of the 1934 Securities Exchange Act. The basis of this complaint is that the officers misrepresented the calculation of HomeSide 's value by not considering the reduced income from the early payoff.

The District Court found it lacked jurisdiction to hear the case. The plaintiffs argued that HomeSide was a Florida corporation and investors had purchased NationalADRs via the New York Stock Exchange. The District Judge found there was no jurisdiction because the acts in the United States were"at most, a link in the chain of an alleged overall securities fraud scheme that culminated abroad." On appeal, the Second Circuit affirmed the dismissal of the complaint. Certiorari was granted.

SCALIA, Justice: We decide whether $10(b) of the Securities Exchange Act of1934 provides a cause of action to foreign plaintiffs suing foreign and American defendants for misconduct in connection with securities traded on foreign exchanges. . . .

Rule 10b-5, the regulation under which petitioners have brought suit, was promulgated under $10(b), and does not extend beyond conduct encompassed by $10(b)'s prohibition. Therefore, if $10(b) is not extraterritorial, neither isRule 10b-5.....

Petitioners and the Solicitor General contend, however, that three things indicate that S10(b) or the Exchange Act, in general, has at least some extraterritorial application. First, they point to the definition of "interstate commerce," a term used in $ 10(b), which includes"trade, commerce, transportation, or communication . . . between any foreign country and any state. But we have repeatedly held that even statutes that contain broad language in their definitions of"commerce" that expressly refer to "foreign commerce" do not apply abroad. The general reference to foreign commerce in the definition of "interstate commerce" does not defeat the presumption against extraterritoriality.

Petitioners and the Solicitor General next point out that Congress, in describing purposes of the Exchange Act, observed that the prices established and offered in such transactions are generally disseminated and quoted throughout the United States and foreign countries. The antecedent of such transactions, however, is found in the first sentence of the section, which declares thattransactions in securities as commonly conducted upon securities exchanges and over-the-counter markets are affected with a national public interest."Nothing suggests that this national public interest pertains to transactions conducted upon foreign exchanges and markets. The fleeting reference to the dissemination and quotation abroad of the prices of securities traded in domestic exchanges and markets cannot overcome the presumption against extraterritoriality.

Finally, there is $30(b) of the Exchange Act, which does mention the Act'sextraterritorial application: "The provisions of [the Exchange Act] or of any rule or regulation thereunder shall not apply to any person insofar as he transacts a business in securities without the jurisdiction of the United States," unless he does so in violation of regulations promulgated by the Securities and ExchangeCommission" to prevent . . . evasion of [the Act].(The parties have pointed us to no regulation promulgated pursuant to $30(b).) The Solicitor General argues that this exemption would have no function if the Act did not apply in the first instance to securities transactions that occur abroad.

we are not convinced. In the first place, it would be odd for Congress to indicate extraterritorial application of the whole Exchange Act by means of a provision imposing a condition precedent to its application abroad. And if the whole Act applied abroad, why would the Commission's enabling regulations be limited to those preventing "evasion" of the Act, rather than all those preventingviolation"? The provision seems to us directed at actions abroad that might conceal a domestic violation or might cause what would otherwise be a domestic violation to escape on a technicality. At most, the Solicitor General'sproposed inference is possible; but possible interpretations of statutory language do not override the presumption against extraterritoriality. . . . In short, there is no affirmative indication in the Exchange Act that $10(b)applies extraterritorially, and we, therefore, conclude that it does not.

Petitioners argue that the conclusion that $ 10(b) does not apply extraterritorially does not resolve this case. They contend that they seek no more than domestic application anyway since Florida is where HomeSide and its senior executives engaged in the deceptive conduct of manipulating HomeSide'sfinancial models... This is less an answer to the presumption against extraterritorial application than it is an assertion-a quite valid assertion-that that presumption here (as often) is not self-evidently dispositive, but its application requires further analysis. For it is a rare case of a prohibited extraterritorial application that lacks all contact with the territory of the United States. But the presumption against extraterritorial application would be a craven watchdog indeed if it retreated to its kennel whenever some domestic activity is involved in the case. . . .

We think that the focus of the Exchange Act is not upon the place where the deception originated, but upon purchases and sales of securities in the United States. Section 10(b) does not punish deceptive conduct, but only deceptive conduct" in connection with the purchase or sale of any security registered on a national securities exchange or any security not so registered."Those purchase-and-sale transactions are the objects of the statute's solicitude. It is those transactions that the statute seeks to regulate; it is parties or prospective parties to those transactions that the statute seeks to protect. And it is in our view only transactions in securities listed on domestic exchanges, and domestic transactions in other securities, to which $10(b) applies. . . .

Finally, we reject the notion that the Exchange Act reaches conduct in this country affecting exchanges or transactions abroad. . . . Like the United States, foreign countries regulate their domestic securities exchanges and securities transactions occurring within their territorial jurisdiction. And the regulation in other countries often differs from ours as to what constitutes fraud, what disclosures must be made, what damages are recoverable, what discovery is available in litigation, what individual actions may be joined in a single suit, what attorney's fees are recoverable, and many other matters. . . .

Section 10(b) reaches the use of a manipulative or deceptive device or contrivance only in connection with the purchase or sale of a security listed on an American stock exchange, and the purchase or sale of any other security in the United States. This case involves no securities listed on a domestic exchange, and all aspects of the purchases complained of by those petitioners who still have live claims occurred outside the United States. Petitioners have therefore failed to state a claim on which relief can be granted. We affirm the dismissal of petitioners'complaint on this ground.