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Abstract: 

Following a remand from the Ninth Circuit, a federal district court in California denied a motion to dismiss a federal securities law class action against Toshiba Corp. by plaintiffs who alleged that they purchased unsponsored ADRs in domestic transactions. The court also refused to dismiss plaintiffs’ Japanese law claim concerning the company’s underlying common stock on the Japanese stock exchanges. The authors discuss the case, its risks for foreign issuers, and its tension with the Supreme Court’s Morrison decision.

Keywords: Stoyas v. Toshiba Corp; American Depositary Receipts (“ADRs”), F-Shares; Domestic Transaction; Securities Exchange Act; Japan’s Financial Instruments & Exchange Act (“JFIEA”)

Affiliations:  1: Cleary Gottlieb Steen & Hamilton LLP; 2: Cleary Gottlieb; 3: Cleary Gottlieb.