Government malfeasance means you're smoked -- especially if it's the SEC that plays with itself rather than doing its job.
Most of us do not live in a state of constant investigation; absent any reason to think we have been injured, we do not typically spend our days looking for evidence that we were lied to or defrauded. And the law does not require that we do so. Instead, courts have developed the discovery rule, providing that the statute of limitations in fraud cases should typically begin to run only when the injury is or reasonably could have been discovered.
The same conclusion does not follow for the Government in the context of enforcement actions for civil penalties. The SEC, for example, is not like an individual victim who relies on apparent injury to learn of a wrong. Rather, a central “mission” of the Commission is to “investigat[e] potential violations of the federal securities laws.” SEC, Enforcement Manual 1 (2012). Unlike the private party who has no reason to suspect fraud, the SEC’s very purpose is to root it out, and it has many legal tools at hand to aid in that pursuit. It can demand that securities brokers and dealers submit detailed trading information. Id., at 44. It can require investment advisers to turn over their comprehensive books and records at any time. 15 U.S.C. §80b–4 (2006 ed. and Supp. V). And even without filing suit, it can subpoena any documents and witnesses it deems relevant or material to an investigation.
In short, the USSC has ruled that unlike a private fraud where the statute of limitations does not run until a fraud is discovered or should have been discovered, there is no tolling for these cases where the SEC is involved, because it is the SEC's job to always be investigating.
The effect of this decision, which was 9-0, is that those who committed fraud prior to the financial crisis just got away with it, as the Statute of Limitations has basically run on the entire period.
So now the SEC can simply play with itself until the five years have run and that's too bad, validating the big banks' strategy to make sure there is a never-ending revolving door between themselves and the government agencies that are supposed to "investigate" those very same firms.
You spelled it wrong. It's spelled "JUST US."
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