Questions Presented
1. Did the Court of Appeals err in concluding that the statute of limitations begins to run not from the moment the plaintiff is on inquiry notice that there may have been a misrepresentation (as some circuits have held), and not from the subsequent point at which a reasonable investigation would have revealed that she had a possible fraud claim (as other circuits have held), but only from the point at which she receives evidence that the investment advisor intended to defraud her?
2. Did the Courts of Appeals err in holding that an investor who is on inquiry notice that she has a basis for a fraud claim, and is, therefore, obliged to make a reasonable inquiry, may reasonably end her investigation just because the suspected defrauders have made assurances that contradict known facts?
Case Updates
U.S. Supreme Court grants cert., then vacates and remands decision
May 03, 2010
The Supreme Court granted review of a securities class action, but then vacated and remanded the case in light of the Supreme Court's decision in Merck & Co., Inc., et al. v. Reynolds, et al. In Merck, the Supreme Court ruled that the statute of limitations on securities fraud claims begins to run once the plaintiff discovers or reasonably would have discovered a violation.
U.S. Chamber files amicus brief
June 30, 2008
NCLC urged the Supreme Court to decide whether the statute of limitations for 10(b)-5 fraud actions begins to run when an investor is put on notice to inquire about the possibility of fraud, or when there is evidence of an actual intent to defraud, as held by the lower court. If the lower court’s decision is left to stand, securities fraud plaintiffs in some circuits could have years longer to bring a lawsuit than plaintiffs raising identical claims in other circuits, effectively eliminating the two-year statute of limitations Congress provided in the law.
Amicus brief filed 6/30/08. Call for the views of the Solicitor General issued 10/6/08. Cert. granted and decision vacated and remanded 5/3/10.