Gabelli v. Securities and Exchange Commission (2012)
- Docket
- 11-1274
- Decided
- 2012-01-01
Summary
Question: Does the five-year statute of limitations begin when the SEC can first bring an action, or when the alleged violation is committed? Conclusion: When the alleged violation is committed. Chief Justice John G. Roberts, Jr., writing for a unanimous Court, reversed the Second Circuit and remanded. Starting the limitations period at the time of the violation is the most natural reading of the statute. This reading is supported by past precedent and dictionary definitions. In the past, the "discovery rule", which pauses the statute of limitations until fraud is discovered, has been applied when the victims of the fraud would be denied relief. The protection that the rule provides for the injured is not relevant to a Government enforcement action such as this one. It would also be nearly impossible to determine when the Government "knows" of a violation and Congress did not require that determination.