The U.S. Supreme Court suggested Monday it would not allow foreign investors to proceed with a lawsuit alleging that National Australia Bank Ltd. and a Florida subsidiary engaged in transnational securities fraud.

The case is a closely watched test on foreign shareholders' ability to bring a securities class action against foreign companies in U.S. courts.

During an hour-long oral argument, several justices suggested that U.S. courts were not the proper jurisdiction for a securities lawsuit that was brought by Australian shareholders who purchased shares of the Australian bank on an Australian exchange.

Justice Ruth Bader Ginsburg said the case "has Australia written all over it."

"Isn't the most appropriate choice the law of Australia rather than the law of the United States?" Ginsburg asked.

At issue are allegations that National Australia Bank's former U.S. mortgage unit, Florida-based HomeSide Lending Inc., deliberately manipulated the value of its mortgage portfolio in order to meet overinflated earnings targets.

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