Stock Fraud Statutes of Limitations May Increase

Stock Fraud Statutes of Limitations May Increase

By John curran

The Supreme Court will have to decide this year about a key point in stock fraud cases: when the clock on the statute of limitations begins. Gabelli Funds LLC has a vested interest in the outcome; they face substantial fines if the court rules in favor of the SEC.

What the agency wants to do is be able to extend the timeframe to a certain extent. They argue that they cannot institute securities fraud proceedings if they are not aware of any wrongdoing. It is a key wrinkle: the fraud occurred in 2002, the investigation in 2003 and the stock fraud claim in 2008. The statute of limitations sets the timeframe at five years, which is why the Supreme Court’s decision matters so much.

It is also an issue for private lawsuits from plaintiffs alleging that there was securities fraud. While investors may be educated, they are unlikely to know whether or not there has been corporate wrongdoing that would limit the distribution of information that would affect stock prices, for example. It is similar to the famous Ford Explorer exploding tire case. A driver and/or owner who is not a mechanic may not be able to reasonably ascertain whether a tread will separate from the rest of the tire.

Several justices have expressed sincere misgivings, however. They think that the stock fraud lawsuit lawyers at the SEC are trying to push a novel precedent, because no one has ever asked for an extension of the statute of limitations. However, as noted with the Explorers, in other practices of law there has been more time provided. While it will likely break in a political fashion, the import will affect companies with employees who commit corporate wrongdoing and securities fraud lawsuit lawyers equally.

Plaintiffs who think that their shares have been affected by malfeasance should act quickly to not be affected by the decision. Contacting a stock fraud lawsuit lawyer is the first step to ascertain whether or not one can pursue a claim. Get started at the Securities Fraud, Stock Fraud Investment Class Action Lawsuit Investigation now. Filling out the short form there entitles one to a free consultation with a securities fraud lawsuit lawyer.

While many investors lose money as a result of malfeasance, they are joined by many other people who suffer from the same problem. Many securities fraud lawsuit lawyers are able to join these into class action cases, resulting in speedy judgment or settlements.

Updated January 15th, 2013

All securities fraud class action and lawsuit news updates are listed in the Stocks & Securities section of Top Class Actions