Court: No extra time to sue for securities fraud

The Associated Press//February 28, 2013//

The Associated Press//February 28, 2013//

WASHINGTON — The U.S. Supreme Court says the federal government doesn’t get more time to sue for securities fraud.

Justices on Wednesday said the Securities and Exchange Commission must file suit within five years of an alleged fraudulent security action, but that the SEC can’t start the clock running whenever it discovers a bad practice.

Writing the court’s unanimous opinion, Chief Justice John Roberts said this was the law’s “most natural” reading.

The case involved Gabelli Funds LLC executive Bruce Alpert and former executive Marc J. Gabelli, who said the SEC missed its chance to sue them for allegedly committing securities fraud by allowing a hedge fund to rapidly trade shares of a mutual fund.

In a second opinion, the court also voted 6-3 to make it easier to file security fraud class action lawsuits.

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