What does Merck & Co. v. Reynolds mean for the future of the statute of limitations defense in securities fraud litigation?

Author： Weissman Andrew B. Robinson Andrea J. Davies Christopher Valentine John A. Titolo Theresa Birlem Jennifer K.

Publisher： Emerald Group Publishing Ltd

ISSN： 1528-5812

Source： Journal of Investment Compliance, Vol.11, Iss.3, 2010-09, pp. : 4-7

Disclaimer: Any content in publications that violate the sovereignty, the constitution or regulations of the PRC is not accepted or approved by CNPIEC.

Previous Menu Next

Abstract

Purpose - The purpose of this paper is to analyze the US Supreme Court's April 27 decision in Merck & Co. v. Reynolds as it affects the statute of limitations defense in securities fraud cases. Design/methodology/approach - The paper explains the background of the Merck opinion, including the limitations period under 28 USC §1658(b)(1) for private securities fraud cases, a District Court dismissal of the original complaint, and a Third Circuit reversal; outlines three principles articulated by the US Supreme Court for applying §1658(b)(1) to securities fraud claims; and discusses what the Merck decision means for private securities fraud litigation. Findings - The Merck decision is likely to affect private securities fraud litigation in several ways, most of which will benefit plaintiffs, who will argue that their claims are not time-barred because the two-year statute-of-limitations clock begins to run later. Originality/value - The paper provides practical guidance by experienced securities lawyers.