Sarbanes-Oxley And The Statute Of Limitations

The June 27, 2003 edition of the National Law Journal contains a column (via – subscrip. required) analyzing the case law on the statute of limitations for securities fraud cases. Sarbanes-Oxley has extended the statute of limitations “to the earlier of two years after the discovery of the facts constituting the violation or five years after such violation.”

Quote of note: Sarbanes-Oxley “clearly provides that this amendment ‘shall apply to all proceedings addressed by this section that are commenced on or after the date of enactment of this Act [July 30, 2002].’ Left unresolved is whether the amendment salvages expired claims or extends the limitations period for pending claims. Compare Roberts v. Dean Witter Reynolds Inc., 2003 WL 1936116 (M.D. Fla. March 31, 2003) (holding that the amendment revives expired claims) with De La Fuente v. DCI Telecommunications Inc., 2003 WL 832009 (S.D.N.Y. March 4, 2003) (holding that the amendment does not apply to claims pending at time of enactment).”

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