Justices on Wednesday said the Securities and Exchange Commission must file suit within five years of an alleged fraudulent security action, but that the SEC can't start the clock running whenever it discovers a bad practice. This clarifies that the FCC cannot go to court to collect an indecency forfeiture unless it commences that action within five years after the broadcast, or if the broadcaster waives the statute of limitations.
SCOTUS Puts Deadline On Govt. Lawsuits
WASHINGTON (AP) — The Supreme Court says the federal government doesn’t get more time to sue for securities fraud.
Justices on Wednesday said the Securities and Exchange Commission must file suit within five years of an alleged fraudulent security action, but that the SEC can’t start the clock running whenever it discovers a bad practice.
Writing the court’s unanimous opinion, Chief Justice John Roberts said this was the law’s “most natural” reading. The case involved Gabelli Funds LLC executive Bruce Alpert and former executive Marc J. Gabelli, who said the SEC missed its chance to sue them for allegedly committing securities fraud by allowing a hedge fund to rapidly trade shares of a mutual fund.
In a second opinion, the court also voted 6-3 to make it easier to file security fraud class action lawsuits.
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