Institutional Investors and Class Action Tolling

Stock fraud, accounting scandals, and predatory behavior by investment banks have long plagued our nation’s financial markets. Fortunately, for over forty years, investors’ individual claims for recovery of damages under the U.S. securities laws have been protected and preserved by the filing of a securities class action. In 2013, however, a split emerged among the federal circuits regarding the scope of this class action “tolling” rule. That split, which recently deepened, has created great uncertainty and imposed heavy burdens on the institutional investor community.