WASHINGTON — The Supreme Court seemed skeptical Tuesday about government claims that it should be allowed more time to sue some fund executives for securities fraud.
The high court on Tuesday heard arguments from Gabelli Funds LLC executive Bruce Alpert and former executive Marc J. Gabelli, who say the Securities and Exchange Commission missed its chance to sue them for allegedly committing securities fraud by allowing a hedge fund to rapidly trade shares of a mutual fund.
Gabelli and Albert say a five-year statute of limitations started no later than 2002 when the action occurred. The SEC argued the clock didn’t start until it discovered the practice in late 2003, which put the 2008 lawsuit within the time limit.
The 2nd U.S. Circuit Court of Appeals agreed that the time limit starts with discovery of the practice.
But Gabelli and Albert’s lawyers noted that government officials had never asserted the ability to stretch out the statute of limitations before this case.