The U.S. Supreme Court has granted certiorari to hear yet another securities case next term: Credit Suisse Securities (USA) LLC v. Simmonds. The issue before the Court in this IPO laddering scandal case focuses on the interpretation and application of the statute of limitations under Section 16(b) of the Securities Exchange Act of 1934 relating to short-swing profits. Specifically, the Court will review whether the two-year statute of limitations "is subject to tolling, and, if so, whether tolling continues after the receipt of actual notice of the facts giving rise to the claim."
The plaintiff filed 54 derivative complaints in connection with 54 IPOs in 1999 and 2000, complaining of an arrangement with underwriters that provided for post-IPO stock purchases at progressively higher prices that resulted in prohibited short-swing profits.
Although it is not clear why the Court has decided to hear this case, it could be to clarify whether the two-year statute operates as a statute of repose or as a "notice" statute.