National Australia Bank Limited (National) (defendant) is an Australian bank whose shares are traded on foreign securities exchanges. In February 1998, National purchased HomeSide Lending, Inc. (HomeSide) (defendant), a domestic mortgage servicing company. From 1998 to 2001, National and HomeSide executives made a series of public statements that overestimated the value of HomeSide’s mortgage-servicing rights. Russell Leslie Owen and Brian and Geraldine Silverlock (plaintiffs) are Australian owners of National’s stock. They brought suit against National and HomeSide in the United States District Court for the Southern District of New York, alleging a violation of Section 10(b) of the Securities Exchange Act of 1934 (Act). The defendants moved to dismiss the complaint for lack of subject matter jurisdiction and failure to state a claim. The District Court dismissed the complaint on grounds that the court lacked subject matter jurisdiction. The Court of Appeals for the Second Circuit affirmed. This Court granted certiorari.