What is the Statute of Limitations on Securities Fraud?

A statute of limitations set a deadline for when legal action must be taken in relation to a particular offense. Depending on the case or claim in question, the statute of limitations can vary widely.

What Does the Federal Law Say About Securities Fraud Claims?

Most securities fraud cases are brought under Section 10(b) of the Securities Exchange Act of 1934 or SEC Rule 10b-5.

For securities fraud claims, legal action must be initiated within two (2) years after the harm was or should have been discovered, and no later than five (5) years after the securities fraud actually occurred.

Of course, in many securities fraud cases, determining the precise deadline that a victim has to take legal action can be incredibly complex.

Therefore, if you believe that you may have been a victim of securities fraud, you need to contact a qualified investment fraud attorney immediately.

How Do You Know When the Statute of Limitations Clock Starts?

Like other areas of investments, the buying and selling of securities are highly technical and extremely complicated.

Further, in many securities fraud cases, the fraud scheme has been perpetrated by a sophisticated party. As such, it is not always easy for investors to recognize that they have been the victim of fraud.

Indeed, it can often take many years.

To account for this issue, U.S. securities law does not start the statute of limitations clock until the victim actually discovers or should have discovered that they were a victim of fraud.

Of course, it is not always clear when an act of fraud was or should have reasonably been discovered.

For example, imagine that you had a bad feeling about your financial advisor last year, but you were not really sure fraud was taking place. Did the statute of limitations already start?

Ultimately, that is a very difficult question to answer, because it will depend on specific facts of the case. As such, determining when exactly when the statute of limitations for a securities fraud claim has started always requires a comprehensive assessment from an experienced professional.

However, there are three important points that investors can apply generally:

1. Take action as soon as possible: If you suspect that you have been a fraud victim, please take action. You do not want to wait and risk losing out on your legal rights simply because of the statute of limitations.
2. Conduct regular due diligence: All investors should conduct regular reviews of their accounts. By doing this, investors can help to ensure that fraud is detected as soon as is reasonably possible.
3. Do not assume you are out of luck: Finally, investors should never give up on their claim because of the statute of limitations. Fraud victims should always let an experienced attorney review their case in detail. For example, in some cases, there may be a series of repetitive acts by the financial advisor that can be classified as one single continuous act for the purposes of the statute of limitations. This can shift the deadline much later than you might initially realize.

Assert Your Securities Fraud Claim Today

At the Sonn Law Group, our securities fraud attorneys are standing by, ready to help.

Please do not hesitate to contact our team today to learn more about how we can help you. We take all securities fraud cases on a contingency basis, meaning we will never collect a fee unless we help you recover compensation.