SEC Asserts Jurisdiction Over UK- Based Securities Fraud

The SEC has filed a securities fraud suit against two UK residents that operated an internet-based stock-touting scheme. The SEC charges that the two brothers sold subscriptions to a newsletter that described recommendations made by a stock-picking robot. The SEC alleges that the newsletter touted stocks that the brothers were hired to tout. Although it appears that the activities occurred outside the U.S., the SEC asserts jurisdiction because the defendants’ conduct “had a foreseeable substantial effect” within the U.S.