Sarbanes-Oxley And The Revival Of Time-Barred Claims

The 11th Circuit and 2nd Circuit are continuing to ponder whether the Sarbanes-Oxley Act of 2002, which extended the statute of limitations for securities fraud claims, revived claims that were time-barred prior to the Act’s passage. Meanwhile, a growing majority of district courts are holding that these time-barred claims must be dismissed. In the past two months, three courts have come to this conclusion: Zurich Capital Mkts. v. Coglianese, 2004 WL 2191596 (N.D. Ill. Sept. 23, 2004); Zouras v. Hallman, 2004 WL 2191031 (D.N.H. Sept. 30, 2004); Milano v. Perot Systems Corp., 2004 WL 2360031 (N.D. Tex. Oct. 19, 2004). Given that the frequency of these cases is bound to decrease over time, the appellate courts better act quickly if they plan to reverse the tide.