On February 27, the U.S. Supreme Court made the right call by rejecting the SEC’s attempt to expand the government’s ability to bring civil penalty actions against financial institutions, businesses and individuals. In Gabelli, et. al. v. SEC, the government had taken the unprecedented position that the “discovery rule” applied to statutory enforcement actions covered under 28 U.S.C. section 2462, the five year statute of limitations provision. An SEC ruling would have allowed the government to bring new claims against companies and individuals based upon old activities if the government took the position that it had no knowledge of the conduct.
Tagged with: Discovery
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