Federal district courts have jurisdiction over any action or proceeding brought by the SEC or DOJ involving transnational securities fraud, so long as:

• the conduct within the US constitutes significant steps in furtherance of the violation; or
• conduct occurring outside the US has a foreseeable substantial effect within the United States.¹

In other words, US courts have jurisdiction over transnational securities fraud even if the securities transaction occurs entirely outside the US and involves only foreign investors.  This is known as the conducts and effects test.²  The challenge for enforcement authorities when defendants litigate insider trading violations is to prove sufficient conduct occurred within the United States.  Regardless, the SEC has proven effective, however, at freezing assets domestically and abroad of entities that have a presence in the United States.