On May 6, 2014, the Second Circuit affirmed the dismissal of a securities class action brought by foreign investors in foreign-issued securities on a foreign exchange notwithstanding that those securities were also cross-listed on a U.S. exchange.  City of Pontiac Policemen’s & Firemen’s Retirement Sys., et al, v, UBS AG, et al, No. 12-4355 (2d Cir. May 6, 2014).  One group of plaintiffs consisting of foreign institutional investors sought to bring a putative class action alleging violations of Sections 10(b) and 20(a) of the Exchange Act of 1934 in connection with the purchase of ordinary shares of UBS AG.  Plaintiffs alleged that UBS overvalued $100 billion in residential mortgage backed securities.    In affirming the dismissal, the Second Circuit applied the Supreme Court’s decision in Morrison v. National Bank of Australia, 561 U.S. 247 (2010).  Morrison held that Section 10(b) only provided a cause of action arising out of transactions in securities listed on domestic exchanges and domestic transactions in other securities.  Plaintiffs argued that their claims were proper under Morrison as the securities at issue were cross-listed on a U.S. exchange, thus bringing their claims under the purview of Section 10(b).  The Second Circuit rejected this argument, reasoning that the intent of the Supreme Court’s Morrison decision was to limit the application of Section 10(b) to purely domestic transactions, “with a domestic listing serving as a proxy for a domestic transactions.”  The Second Circuit held that the claims by foreign investors, of a foreign security on a foreign exchange are not saved “simply because those shares are also listed on a domestic exchange.”