Sarbanes-Oxley Act bars old claims
Publish date: 15 September 2004
Issue Number: 1175
Diary: Legalbrief Today
Category: General
A US District Court has ruled that although the Sarbanes-Oxley Act of 2002 established more generous time limits for filing securities claims, the law could not be used to revive claims for which the previous, shorter time limits had already expired.
The Legal Intelligencer reports lawyers for the plaintiff\'s urged Judge Anita Brody to rely on the legislative history of the law which, they said, showed that Congress intended the new time limits to apply to any case filed after the statute was passed. Brody refused, saying such an inquiry would be inappropriate since the US Supreme Court has held that there was a strong presumption against retroactive application of any new limitations period, and that if Congress wanted to override that presumption and set new time limits that effectively revive dead claims, it must do so unambiguously. The ruling applied to a suit brought by L-3 Communications, a defence contractor, which claimed it was the victim of a fraud scheme perpetrated by the top executives of a group of companies it acquired in 1998. Brody found that if the old time limits applied, the claims would be barred because the alleged fraud occurred in August 1998 when the merger took place, and was allegedly discovered in January 2002, but L-3 did not file its suit until July 2003. Full report in The Legal Intelligencer