Securities law statute of limitations ruling overturned.Congress overturned a favorable ruling by the U.S. Supreme Court that limited the time investors had to bring securities fraud suits. In Lampf v. Gilbertson, the Court ruled litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. instituted under section 10(b) of the Securities Exchange Act of 1934 and rule 10b-5 must begin within one year after discovery of the violation and no more than three years after the fraudulent act itself (see Legal Scene, JofA, Sept.91, page 28). Since the decision applied retroactively, lower courts would have dismissed many pending security fraud claims on statute of limitations A type of federal or state law that restricts the time within which legal proceedings may be brought. Statutes of limitations, which date back to early Roman Law, are a fundamental part of European and U.S. law. grounds. Congress, fearing defendants such as Charles Keating  An editor has expressed concern that this article or section is .Please help improve the article by adding information and sources on neglected viewpoints, or by summarizing and and Michael Milken Michael Milken As an executive at Drexel Burnham Lambert Inc. during the 1980s, Milken used high-yield junk bonds for financing and corporate takeovers. While his personal wealth was enormous, he spent two years in prison after pleading guilty to charges of securities fraud. might benefit, began immediate action to overturn the ruling. As a result, one of the provisions of the Federal Deposit Insurance Corporation Federal Deposit Insurance Corporation (FDIC), an independent U.S. federal executive agency designed to promote public confidence in banks and to provide insurance coverage for bank deposits up to $100,000. Improvement Act of 1991, signed into law by the president last December, is elimination of the retroactive Having reference to things that happened in the past, prior to the occurrence of the act in question. A retroactive or retrospective law is one that takes away or impairs vested rights acquired under existing laws, creates new obligations, imposes new duties, or attaches a impact of Lampf. Under the new law, plaintiffs with securities fraud actions pending on or before June 19, 1991-the date of the Lampf decision-are beneficiaries of the more liberal statute of limitations periods preceding Lampf. Congress is now considering muting completely the favorable impact of the decision for defendants. Currently pending is the Securities Investors Legal Rights Act of 1991. If enacted, the bill will provide investors with three years to bring an action from the date of discovery of a violation but no more than five years from the date of the fraudulent act. This likely will lead to an increase in litigation against accountants and other defendants involved in securities litigation. |
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