High Court To Consider Time Limit For Derivative Claims
This article discusses the recent U.S. Supreme Court decision to grant a petition for writ of certiorari in the securities case Credit Suisse Securities (USA) v. Simmonds. Along with a number of national law firms, Lane Powell is representing a group comprised of the IPO underwriters.
The U.S. Supreme Court on Monday agreed to hear a group of investment banks’ challenge to a Ninth Circuit ruling in a case involving initial public offerings with broader implications for shareholder derivative suits brought after the statute of limitations codified in federal securities laws.
The high court agreed to hear an appeal of a December decision reviving 24 lawsuits that were part of a consolidated securities action over initial public offerings of 54 companies in the late 1990s on the grounds that a lower court incorrectly dismissed them with prejudice based on the underwriters’ assertion that the two-year statute of limitations had elapsed for the claims. The suits alleged that the underwriters engaged in prohibited short-swing transactions.
In their petition for certiorari, the underwriters argued that the 30-year-old rule on which the Ninth Circuit relied, established in a 1981 case called Whittaker v. Whittaker Corp., was out of step with established precedents in the Second Circuit and needed to be resolved by the Supreme Court.
This article first appeared in Law360.