New York Court of Appeals Rules that Civil Securities Fraud Claims Brought Under Martin Act are Subject to Three-Year Statute of Limitations

In People v. Credit Suisse Securities (USA) LLC, No. 40, 2018 WL 2899299 (N.Y. June 12, 2018), the Court of Appeals for the State of New York ruled that the three-year statute of limitations of Section 214(2) of the New York Civil Practice Law & Rules (“CPLR”) applies to civil enforcement actions brought under the Martin Act (General Business Law article 23-A) on the basis of a “fraudulent practice” as defined in General Business Law § 352(1). In doing so, the Court overruled both the New York Supreme Court and the Appellate Division and rejected the New York Attorney General’s (“NYAG”) attempt to apply a six-year statute of limitations under CPLR 213(8), which governs the limitations period for common law fraud. The Court’s decision narrows the window of opportunity to assert civil securities fraud claims under the Martin Act’s more forgiving standard. Prosecutors wishing to avail themselves of CPLR 213’s…

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