Gabelli_v._SEC
Gabelli v. SEC
2013 United States Supreme Court case
Gabelli v. SEC, 568 U.S. 442 (2013), was a United States Supreme Court case in which the Court ruled that the statute of limitations for filing civil penalty actions initiates when the offending act is committed or finished.[1][2][3]
| Gabelli v. SEC | |
|---|---|
| Argued January 8, 2013 Decided February 27, 2013 | |
| Full case name | Gabelli et al. v. Securities and Exchange Commission |
| Docket no. | 11-1274 |
| Citations | 568 U.S. 442 (more) 133 S. Ct. 1216; 185 L. Ed. 2d 297; 2013 U.S. LEXIS 1861; 81 U.S.L.W. 4142 |
| Argument | Oral argument |
| Case history | |
| Prior | SEC v. Gabelli, No. 1:08-cv-03868, 2010 WL 1253603 (S.D.N.Y. Mar. 17, 2010); reversed, 653 F.3d 49 (2d Cir. 2011); cert. granted, 567 U.S. 968 (2012). |
| Subsequent | SEC v. Gabelli, 518 F. App'x 32 (2d Cir. 2013) |
| Holding | |
| The statute of limitations for filing civil penalty actions initiates when the offending act is committed. Reversed and remanded. | |
| Court membership | |
| |
| Case opinion | |
| Majority | Roberts, joined by unanimous |
| Laws applied | |
| 28 U.S.C. § 2462 | |
Suit
The Securities and Exchange Commission filed suit against Bruce Alpert and Marc Gabelli of Gabelli Funds, LLC, alleging the firm made secret agreements with Headstart Advisers Ltd concerning Headstart's investment in a mutual fund managed by Gabelli. Headstart realized large profits at the expense of Gabelli's remaining investors, and the SEC argued that Gabelli's actions violated the Investment Advisers Act. Gabelli and Alpert sought dismissal of the case, arguing the SEC lawsuit came after the five year statute of limitations expired. In response, the SEC argued that under the discovery rule, the statute had not expired when the case was filed.[1]
Ruling
In a unanimous decision, Chief Justice John Roberts ruled against the federal government's argument that the discovery rule determined the statute of limitations for filing the fraud lawsuit. Roberts' opinion explained that the discovery rule, which starts the statute of limitations once the plaintiff becomes aware of the fraud, applies only to victims of the fraud itself. Government regulatory agencies are subject to the standard rule, which initiates the standard of limitations upon the perpetration of the fraud. Under this earlier threshold, the SEC missed the five-year deadline to file suit against Gabelli. The Supreme Court's decision reversed the earlier decision of the Second Circuit, and the case was remanded to the lower courts.[1]
- Macey, Jonathan (February 28, 2013). "Opinion analysis: That which does not kill the SEC may make the agency stronger". SCOTUSblog. Retrieved October 19, 2013.
- Dimond, Thomas. "Supreme Court Clarifies Federal Statute of Limitations And Restricts Civil Penalty Actions". Ice Miller LLP. Archived from the original on October 20, 2013. Retrieved October 19, 2013.
- Text of Gabelli v. SEC, 568 U.S. 442 (2013) is available from: CourtListener Google Scholar Justia Oyez (oral argument audio) Supreme Court (slip opinion) (archived)