Laurie Green is a Partner in our Ft Lauderdale office, Danielle Price a Partner in our Miami office & Michael Taylor is a Partner in our Portland office
On February 27, 2013, the U.S. Supreme Court decided that if the SEC wants to bring civil penalties against an investment adviser for fraud, there is a five-year statute of limitation period which starts to toll from the date the fraudulent activity occurs. The Investment Advisers Act allows the SEC to seek civil penalties against investment advisers committing fraud, but there was a debate over when the five-year statute of limitation started to run. The petitioners in the case raised the argument that because the SEC filed charges against them in April 2008 for "market timing" which occurred until August 2002, the statute of limitations had run out and the complaint should be dismissed. The SEC tried to argue that the discovery rule applied because it was a case of fraud and therefore the statute of limitations does not begin to toll until the fraud is discovered. The Supreme Court determined that the discovery rule has only been used when the plaintiff was a defrauded victim, not when the government was trying to seek civil penalties under an enforcement action.
http://www.supremecourt.gov/opinions/12pdf/11-1274_aplc.pdf
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