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Marc J. Gabelli And Bruce Alpert, Petitioners v. Securities And Exchange Commission

• 2012 • 568 U.S. 442 • Roberts Court
In the case of Marc J. Gabelli and Bruce Alpert v. Securities and Exchange Commission (SEC), 2012, the U.S Supreme Court ruled in favor of Gabelli and Alpert, who were executives at an investment adviser firm. The SEC had accused them of committing securities fraud by not disclosing a client's rapid trading practices to investors from 1999-2002. However, they didn't file charges until 2008 - two years after discovering the alleged misconduct but five years after it occurred. Under federal law,...Open Case
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Chief Roberts Court
Term: 2012
Docket: 11-1274
568 U.S. 442
133 S. Ct. 1216
185 L. Ed. 2d 297
2013 U.S. LEXIS 1861
Argued: Jan 08, 2013

Marc J. Gabelli And Bruce Alpert, Petitioners v. Securities And Exchange Commission

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Questions presented:
SCOTUS Records

11-1274 GABELLI, ET AL. V. SEC DECISION BELOW: 653 F.3d 49 CERT. GRANTED 9/25/2012 QUESTION PRESENTED: Section 2462 of Title 28 of the United States Code provides that "except as otherwise provided by Act of Congress" any penalty action brought by the government must be "commenced within five years from the date when the claims first accrued." (emphasis added). This Court has explained that "[i]n common parlance a right accrues when it comes into existence." United States v. Lindsay, 346 U.S. 568, 569 (1954). Where Congress has not enacted a separate controlling provision, does the government's claim first accrue for purposes of applying the five-year limitations period under 28 U.S.C. § 2462 when the government can first bring an action for a penalty? LOWER COURT CASE NUMBER: 10-3581-cv, 10-3628-cv, 10-3760-cv

Opinion Summary
AI Abstract

In the case of Marc J. Gabelli and Bruce Alpert v. Securities and Exchange Commission (SEC), 2012, the U.S Supreme Court ruled in favor of Gabelli and Alpert, who were executives at an investment adviser firm. The SEC had accused them of committing securities fraud by not disclosing a client's rapid trading practices to investors from 1999-2002. However, they didn't file charges until 2008 - two years after discovering the alleged misconduct but five years after it occurred. Under federal law, there is a five-year statute of limitations for penalty enforcement actions which begins when fraudulent activity occurs rather than when it is discovered by authorities (the "discovery rule"). The court unanimously held that this discovery rule does not apply to government penalty enforcement cases like this one because unlike private parties who may be unaware they have been defrauded until much later; governmental bodies are expected to diligently investigate potential frauds.

Dissent Summary
AI Abstract

In the dissenting opinion for Gabelli v. Securities and Exchange Commission, Justice Sonia Sotomayor argued that the majority's interpretation of the statute of limitations was too narrow. She contended that it should begin when fraudulent activity is discovered by authorities rather than when it occurs. This would allow more time for complex fraud cases to be investigated and prosecuted effectively, as they often take longer to uncover due to their intricate nature. Furthermore, she pointed out that this approach aligns with other areas of law where a discovery rule applies in instances where harm may not be immediately apparent or detectable. Thus, she disagreed with the majority’s decision which could potentially limit enforcement actions against financial fraudsters who are successful at hiding their misconduct until after the five-year window has passed.

Opinion written by Justice JGRoberts
Decided: Feb 27, 2013
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