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TCH Files Amicus in CalPERS v. ANZ Securities

The Clearing House (TCH) and SIFMA have filed an amicus brief with the SCOTUS in support of the respondents, ANZ Securities, Inc., et al. in California Public Employees’ Retirement System v. ANZ Securities, Inc. et al.

The question addressed by amici is about the interaction between the American Pipe rule—which tolls statutes of limitations for members of a putative class during the pendency of the class action—and Section 13 of the Securities Act, which provides a one-year statute of limitations for securities fraud actions under Section 11, and, critically, a three-year statute of repose that runs from the time that “the security [at issue] was bona fide offered to the public.” The case arose out of the Lehman Brothers collapse. A putative class action was filed in 2008 against the underwriters of Lehman debt offerings, alleging that the underwriters made material misstatements about Lehman’s accounting practices, risk-management, and mortgage-related exposure in registration statements. Petitioner, despite being a member of the putative class, filed its own action in February 2011 (more than three years after the Lehman debt offering).  Petitioner’s action was consolidated into an ongoing MDL in the S.D.N.Y.  After the original class action settled and a settlement class was certified, petitioner opted out of the class and sought to continue pursuing its claims against the underwriters. The district court held that the three-year statute of repose barred petitioners’ claims, and the Second Circuit affirmed.

In the amicus, the Associations argue that: (i) the Petitioner’s submission that tolling under American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974), applies to all “limitations periods,” regardless of whether Congress created a “statute of limitation or a statute of repose,” and regardless of the rest of the statutory scheme at issue, is false, and (ii) the Second Circuit’s rule will not compromise investors’ due process rights nor create a “logistical and risk management nightmare for courts and defendants.”