- GOP hopes taking shutdown off the table with budget deal will pay dividends
- Chinese Death Star: The moon cited as the perfect launch pad for ballistic missiles
- Help wanted: Homeland Security plagued by vacancies at the top
- We are not amused: Queen’s protection officers warned to keep ‘sticky fingers’ off the royal cashews
- Unleash the crossbows: Gov. Scott Walker creates new hunting season
- Bubonic plague kills 20 in Madagascar
- G-20 diplomats fell for hacker attack promising nude photos of former French first lady Carla Bruni
- Minnesota guardsman charged with stealing private soldier data for fake IDs
- Florida appeals court rules universities can’t regulate guns
- Vladimir Putin defends Russian conservative values
Supreme Court seems skeptical about extension to sue for securities fraud
WASHINGTON (AP) — The Supreme Court seemed skeptical Tuesday about government claims that it should be allowed more time to sue some fund executives for securities fraud.
The high court on Tuesday heard arguments from Gabelli Funds LLC executive Bruce Alpert and former executive Marc J. Gabelli, who say the Securities and Exchange Commission missed its chance to sue them for allegedly committing securities fraud by allowing a hedge fund to rapidly trade shares of a mutual fund.
Gabelli and Mr. Albert say a five-year statute of limitations started no later than 2002, when the action occurred. The SEC argued the clock didn't start until it discovered the practice in late 2003, which put the 2008 lawsuit within the time limit.
The 2nd U.S. Circuit Court of Appeals agreed that the time limit starts with discovery of the practice.
But Gabelli and Mr. Albert's lawyers noted that government officials had never asserted the ability to stretch out the statute of limitations before this case.
"The position that the SEC is taking now is a novel position that to our knowledge has not been taken by other regulators and hasn't been taken by the SEC until quite recently," attorney Lewis J. Liman said.
Several justices agreed.
"What's extraordinary is that the government has never asserted this, except in the 19th century, when it was rebuffed and repudiated its position. It isn't just that there are no cases against you. It's you've never — the government has never asserted it before," Justice Antonin Scalia said.
Justice Stephen G. Breyer noted that any statute of limitation extension would affect more than just security cases.
"It is a statute that applies to all government actions, which is a huge category across the board," said Justice Breyer, who said that extending the time limit could affect government enforcement actions involving Social Security, Veterans Affairs and Medicare.
"It seems to me to have enormous consequences for the government suddenly to try to assert a quasi-criminal penalty and abolish the statute of limitations, I mean, in a vast set of cases," Justice Breyer said.
And Justice Elena Kagan suggested that the only reason the government is trying to stretch back and go after Gabelli and Mr. Albert is that the New York attorney general's office got there first.
"The government had decided not to go after market timers," she said. "And it changed its decision when a state attorney general decided to do it, and it embarrassed them that they had made that enforcement priority decision, and then the government made a different enforcement priority decision."
Justice Department lawyer Jeffrey B. Wall said he didn't think that suggestion was fair. He also said he couldn't believe that lawmakers intended to create such an obvious loophole.
"I cannot imagine that the Congress, which allowed agencies to seek civil penalties ... would have thought that the only people who could get away without paying them are the ones who commit fraud or concealment and that remains hidden for five years," Mr. Wall said.
A decision is expected by summer.
By Mangosuthu Buthelezi
Memories of a long brotherhood tempered in common struggle
- Obama's Afghanistan experts stumped on U.S. death toll, war costs during hearing
- NAPOLITANO: A conspiracy so vast
- House votes for bargain to end budget drama
- Biden guarantees victory on immigration reform
- Comma on!: Twitter erupts over Obama-Castro 'marriage'
- ICT trade mission to Azerbaijan successfully completed
- Obama takes 'selfie' at Mandela's funeral service
- CHELLANEY: China's game of chicken
- Inside China: Ukraine gets nuke umbrella
- EDITORIAL: The Potemkin website
Independent voices from the The Washington Times Communities
Consummate traveler Todd DeFeo explores the unique stories that make destinations worth going to.
Covering the world of soccer, including the World Cup, Major League Soccer, D.C. United and the English Premier League and other interesting sporting events.
Born in 1930 in rural Missouri, Charles Vandegriffe, Sr., brings his time and place to the Communities.
Columns from Voices around the World talking about the events, people, politics and social issues that concern us wherever, and whoever, we are.
Extraordinary day at Redskins Park
White House pets gone wild!
Let it snow