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Supremes Set To Smack SEC on Statutes of Limitations

Things aren’t going well for you when you find yourself at the receiving end of sharp words from both Supreme Court Justices Antonin Scalia and Ruth Bader Ginsberg. Well, that’s where the SEC finds itself in its effort to read a five-year statute of limitations creatively.

Justices across the ideological spectrum suggested that the government was asking for too much in its reading of a statute that sets time limits on when regulatory agencies can file civil complaints.

The law says the actions must be filed within five years of the violation, but the government contends that in fraud cases, that means five years from the time an agency discovered, or should have discovered, a violation.

The case in question involves Gabelli Funds, which the SEC says improperly allowed a hedge fund to market-time its mutual funds. The only problem is, the SEC said it more than five years after the last questionable trade.

Sayeth Scalia: “What’s extraordinary is that the government has never asserted this, except in the 19th century, when it was rebuffed and repudiated its position.”

And from the other side of the High Court’s right-left divide, Ginsburg, who called five years a “generous” statute of limitations. Ginsburg’s ideological buddy, Justice Elena Kagan, added that having Eliot Spitzer embarrass you into doing something about market-timing probably isn’t a good enough reason to ignore an SoL.

Supreme Court seems reluctant to extend time limits for SEC actions [WaPo]
Justices Skeptical of SEC [WSJ]

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7 Responses to “Supremes Set To Smack SEC on Statutes of Limitations”

  1. Im_a_Dude says:

    If our friends at the SEC would spend a little less time on ilovetrannies.com, maybe they would have more luck in bringing cases within the statue of limitations.

  2. Mrs_Slocombe says:

    What, a 5 year rolling statue of limitations…….wait, I forgot my pithy comment as I am totally distracted watching TBS and high from all the MSG in my Gordita.

  3. Hakuna Matata Guy says:

    It's Statue.

  4. el invitado says:

    You spelled Ginsburg incorrectly in the hyperlink in the first paragraph.

  5. Long'un says:

    Why does Antonin have that slightly pained yet smugly satisfied expression on his face?

  6. sohbet says:

    telling these little stories, here's a good idea: Have a point. It makes it so much more interesting for the listener.