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Limitations on the SEC: The Application of 28 U.S.C. § 2462 in SEC Proceedings
Ronald W. Breaux, Jeremy D. Kernodle
Although there is no express statute of limitations for lawsuits instituted by the SEC,1 numerous courts have held - and the SEC has acknowledged2 - that the federal “catch all” statute of limitations, 28 U.S.C. § 2462, applies to claims brought by the SEC.3 Section 2462 provides that “an action, suit or proceeding for the enforcement of any civil fine, penalty, or forfeiture, pecuniary or otherwise, shall not be entertained unless commenced within five years from the date when the claim first accrued . . . .”4 As shown below, section 2462 has served as an important deterrent to untimely claims brought by the SEC in federal courts. This Article analyzes three common questions that arise in litigating that provision: what type of claims are subject to the statute, when does a claim accrue, and what tolling doctrines does the SEC invoke in attempting to bring untimely claims.
Excerpted from Securities Reform Act Litigation Reporter, Vol. 31, No. 1, April 2011. Reprinted by permission. To read the full article, click on the PDF linked below.