Second Circuit Holds That Kazakh Sovereign Wealth Fund Is Not Immune From Securities Fraud Suit

Addressing an issue of first impression, on February 3, 2016, the United States Court of Appeals for the Second Circuit held that the Foreign Sovereign Immunities Act (“FSIA”) did not immunize an instrumentality of a foreign sovereign against claims that it had violated federal securities laws by making representations outside the United States concerning the value of securities purchased by investors within the United States. The decision follows other recent precedents interpreting the FSIA’s commercial activity exception and presents important questions concerning the types of commercial activities that may strip foreign states and state-owned entities of sovereign immunity and subject them to the jurisdiction of U.S. courts.