Still More On Sarbanes-Oxley And The Statute Of Limitations

The 10b-5 Daily continues to avidly follow the district court split over whether the extended statute of limitations for securities fraud in the Sarbanes-Oxley Act of 2002 revives time-barred claims. District courts have gone both ways on this question and the issue is currently before the U.S. Court of Appeals for the 11th Circuit.

Buried in a large Enron decision from last month is a new ruling on the issue. In Newby v. Enron Corp., 2004 WL 405886 (S.D. Tex. Feb. 25, 2004) , the court addressed a motion to intervene by the Imperial County Employees Retirement System. One issue was whether the proposed intervenor’s claims would be time-barred. The decision has an extensive discussion of relevant case law and, on the revival of time-barred claims, holds:

“With regard to claims that were time-barred by the shorter one-year statute of limitations under Lampf prior to the enactment of the Sarbanes-Oxley Act, this court agrees with [the decision in Glaser v. Enzo Biochem, Inc., 2003 WL 21960613 (E.D. Va. July 16, 2003] that in what this Court finds is an absence of any expression of specific intent that Sarbanes-Oxley should apply retroactively, either in the Act or the legislative history, the Sarbanes-Oxley Act’s extended limitations period cannot revive stale claims.”

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