Blue sky laws and the recent Congressional preemption failure

Article Abstract:

The National Securities Markets Improvement Act of 1996 has failed to deliver the broad preemption of state blue sky laws that would have substantially reduced the compliance burdens imposed by states. Stock issuers, particularly small issuers, must bear the cost of compliance in 51 disparate jurisdictions. Congress should have broadly preempted state law and imposed a single, coherent securities law scheme. One promising component of the Act is regulatory authority delegated to the Securities and Exchange Commission to address the needs of small companies.

Exclusive and concurrent legislative powers, Preemption (Legislative power), states

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Five-year statute of limitations period held applicable

Article Abstract:

The US Court of Appeals for the D.C. Circuit ruled in Johnson v. SEC that an administrative proceeding brought by the SEC to impose civil penalties on a stock brokerage supervisor was barred by the five-year statute of limitations under 28 U.S.C. 2462. The statute of limitations applies to all proceedings in which a penalty is sought that not simply remedial. The SEC had made no showing that its action was intended to prevent future harm. The SEC is in the process of reviewing its existing case load to determine if other actions may be time-barred as well.

Administrative remedies

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The federal securities acts' one-year inquiry notice statute of limitations: are the scales tipped against fraud claimants?

Article Abstract:

The one-year statute of limitations imposed on securities fraud plaintiffs is designed to encourage prompt action by investors, but it also makes pleading securities fraud more difficult. The statute requires suit within one year of events that should have led the reasonable investor to be on notice to investigate further whether fraudulent conduct may have occurred. Since securities fraud must be pleaded with particularity, the plaintiff's pleadings may reveal that events occurred over one year earlier that should have triggered further inquiry.

Securities fraud, Notice (Law)

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