The SEC is now pushing Congress to double its existing five-year time limit (applicable to Foreign Corrupt Practices Act offenses and many others) to ten years. Senator Jack Reed (D-RI), a high-ranking member of the Senate Banking Committee, reportedly intends to introduce legislation this fall.
But the SEC already has several arrows in its quiver, such as the discovery rule and the fraudulent concealment doctrine, to extend the five-year statute of limitations in many cases. Moreover, a statute of limitations is largely a meaningless legal principle in most corporate SEC enforcement actions given that cooperation, and not necessarily the law and the facts, dictate the outcome in many corporate enforcement actions and thus motivate most corporations under SEC scrutiny to sign tolling agreements suspending the statute of limitations or to waive statute of limitations defenses altogether. In short, the SEC faces few meaningful time constraints in bringing corporate enforcement actions.
‘Enforcement 40’ for 2020
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