F-cubed concept

A concept whereby US courts accept jurisdiction over cases, where foreign shareholders sue foreign companies whose shares were traded primarily through foreign exchanges. Judges defined so-called conduct and effect tests to determine their jurisdiction. In the last few years, it has popped up in some high-profile securities class actions, giving the issue a new prominence. Cases involving alleged frauds at Vivendi Universal S.A., Parmalat Finanziaria S.p.A, Bayer AG, Royal Dutch Shell plc, and Royal Ahold. At first only shares purchased in the exchanges were to deserve compensation. Recently with the globalisation it looks to become of relevance also for other foreign shareholders.