United States Second Circuit

In a suit brought by a registered private investment fund, asserting that Bear Sterns Companies and its auditors made material misrepresentations in violation of SEC Rule 36 10b‐5 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and engaged in common law fraud, the District Court's dismissal of the complaint is affirmed where: 1) plaintiff's Section10(b) and Rule 10b‐5 claims as time‐barred, as the class action tolling rule set forth in Am. Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974), does not apply to 28 U.S.C. section 1658(b)(2), the five‐year statute of repose that limits the time in which plaintiffs may bring claims under Section 10(b) and Rule 10b‐5; 2) plaintiff's Section 20(a) claims fail to state a primary violation of Section 10(b); and 3) plaintiff's common law fraud claims fail because New York law does not recognize holder fraud claims and plaintiff failed adequately to plead reliance.

Appellate Information

• Published 2016/07/14

Judges

• LOHIER

Court

• United States Second Circuit

Counsel