|  | | 2004 News and Press Releases | | |
HEADLINE NEWS:
Longer SOXA Limitations Period Does Not Revive Expired Fraud Claims
Phyllis Diamond
Securities Regulation & Law Report Banner. December 13, 2004
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EXCERPT: Section 804 of the 2002 Sarbanes-Oxley Act, which extended the statute of limitations for private securities fraud suits, "does not revive plaintiffs' expired securities fraud claims," the U.S. Court of Appeals for the Second Circuit affirmed Dec. 6 (In re Enterprise Mortgage Acceptance Co. LLC Securities Litigation (Aetna Life Insurance Co. v. Enterprise Mortgage Acceptance Co. LLC), 2d. Cir., Docket No. 03-9261, 12/6/04). Ruling in two unconsolidated cases that raised substantially the same timeliness question, the court, in an opinion by Judge Jose A. Cabranes, said that neither the statutory language nor the law's legislative history suggests that Congress intended retroactive application. As such, it deferred to the "longstanding presumption" against retroactivity. The court's decision--which apparently is the first by a federal court of appeals--is consistent with rulings by other courts that have considered the issue (See, e.g., 36 SRLR 1172, 6/28/04; 36 SRLR 1220, 7/5/04 ). However, it is contrary to the view urged by the Securities and Exchange Commission in an amicus curiae brief to this court in other litigation (36 SRLR 1604, 9/6/04 ). Prior to SOXA's enactment on July 30, 2002, private securities fraud actions had to be brought within one year after discovery of the facts constituting the violation and within three years after the violation occurred. Section 804 of the act increased the periods to two years and five years, respectively. |
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