US Supreme Court Holds that 3-Year Time Limit to Challenge Registration Statements Cannot Be Tolled, Precluding Opt-Out Plaintiffs from Filing Individual Actions

June 27, 2017

Officers, directors, and underwriters frequently become targets of securities fraud litigation after a public offering. In a landmark case decided yesterday, the U.S. Supreme Court provides defendants with another tool to defeat these lawsuits. It held that Section 11 challenges to a registration statement must be filed within three years after the public offering—there are no exceptions, and there is no tolling. This time bar applies even to plaintiffs who wish to opt-out of class actions in order to pursue their own individual action.

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