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By: Ali Sabzevari
New York’s primary weapon aimed at fraud entitled the Martin Act was drastically hindered by New York’s high court, which found that the law’s statute of limitations was three years, not six years. The case is People v. Credit Suisse Sec. (USA) LLC, 2018 NY Slip Op 04272, ¶ 1 (New York State Court of Appeals).
The Martin Act has been used to police the securities markets since the 1920s. This Act regulates the advertisement, issuance, exchange, purchase or sale of securities, commodities and certain other investments within or from New York. It is one of the country’s oldest anti-fraud laws and is used by the New York Attorney General to file both civil suits and criminal charges against alleged violators of the Act.
In the Credit Suisse Sec. (USA) LLC opinion, the Court of Appeals noted that it had never before considered the law’s statute of limitations. Contemplating whether claims were governed by a three-year period or a six-year period, the Court ultimately held that the three-year term applies because of the fraudulent nature of the claims brought under the Martin Act.
This decision will have a big impact on claims brought under the Martin Act as well as the defense of such claims. If you have any questions or would like more information, please contact Ali Sabzevari at [email protected].