Fraud Claim Statute of Limitations May Be Five Years
The Supreme Court recently started proceedings that could enforce the recovery of a securities fraud claim statute of limitations to five years. This could make it tougher for the government to recover claims from people convicted of securities fraud.
At issue is a law that prevents the government from imposing penalties or seeking forfeiture of assets going back more than five years. During arguments in a high-profile securities fraud case spanning several decades, the justices – including newly appointed Supreme Court Justice Neil Gorsuch – seemed to agree that there should be a five-year statute of limitation on the recovery of funds.
A ruling could affect the Securities and Exchange Commission (SEC), preventing the agency from collecting large sums in cases where the alleged fraud goes back years or decades. In 2016 alone, the SEC collected more than $4 billion in "disgorgement" actions and other penalties for securities fraud. A five-year statute of limitations could drastically affect this figure in the future.
Venture Capitalist Fraud Case Stirs Ideas of Statute of Limitations
The issue has arisen as the court decides whether venture capitalist Charles Kokesh must return $35 million dollars of investor funds. From 1995 to 2006, Charles Kokesh used investor funds to pay himself and others at his New Mexico-based operation.
The SEC argues that since it is only trying to recover illicit profits, the time limit should not apply in this case. Kokesh’s attorney told judges that disgorgement has to be considered punitive overall – if it is meant to both recover assets and impose penalty – and should be subject to the five-year limit.
Call a Securities Fraud Attorney Today
If you are looking for a securities fraud attorney to review your rights and options, the lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerages firms for their wrongful actions.