In a 4-to-1 decision in the Credit Suisse case, the New York Court of Appeals held that the statute of limitations to bring a claim under the Martin Act is three and not six years.
The decision relieves Credit Suisse from an action commenced in 2012, seeking $11 billion in damages from the financial firm's 2006 and 2007 marketing and sale of mortgage bonds. Enacted in 1921, the Martin Act permits the New York State Attorney General to investigate and prosecute fraudulent securities sales practices. The court's majority opinion proposed that, while the claims against Credit Suisse are time barred under the Martin Act, they may be viable under New York's Executive Law. Arguing that the legislature intended the statute of limitations to be six years, the dissent alerted the legislature to correct any ambiguity in the statute's drafting.
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This article was written with contributions from Nabeela Latif.
