Knowledge and Notice in Section 10(b) Limitations Law

Section 10(b) of the Securities Exchange Act of 1934 prohibits an issuer of securities from tricking buyers into their purchase through any sort of fraudulent representation. In Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson (1991), the US Supreme Court articulated a uniform federal limi...

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Bibliographic Details
Published in:	The Yale law journal 1994-05, Vol.103 (7), p.1939-1969
Main Author:	Ford, Christopher A.
Format:	Article
Language:	eng
Subjects:	Defendants Due diligence Economic criminality Economic law Federal law Fraud Investors Law Laws, regulations and rules Limitation of actions Litigation Misrepresentation Plaintiffs Securities and Exchange Commission (SEC) Securities fraud Securities regulations Statute tolling Statutes of limitations Supreme Court decisions United States
Online Access:	Get full text
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Summary:	Section 10(b) of the Securities Exchange Act of 1934 prohibits an issuer of securities from tricking buyers into their purchase through any sort of fraudulent representation. In Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson (1991), the US Supreme Court articulated a uniform federal limitations rule for Section 10(b) actions: they must be brought within one year after the discovery of the facts constituting the violation and within 3 years after such violation. This judicially created limitations period remains ambiguous and is subject to 5 possible interpretations. The approach which most appropriately serves the policy interests and equitable traditions of federal securities law is one that embodies both constructive knowledge and inquiry notice so as to deny the benefits of tolling to plaintiffs who have not acted with reasonable dispatch to preserve their rights.
ISSN:	0044-0094 1939-8611