On February 27, 2013, the United States Supreme Court held that in SEC enforcement actions, the five year statute of limitations governing civil penalties begins to run at the time that the violation occurs, not when the SEC discovers to violation. Gabelli v. SEC, 133 S. Ct. 1216 (2013) (No. 11-1274). In 2008, the government brought an action seeking civil penalties against Bruce Alpert and Marc Gabelli, alleging that from 1999-2002, they aided and abetted a market timing fraud. SEC actions seeking civil penalties are governed by 28 U.S.C. § 2462, which gives the government five years “from the date when the claim first accrued” to bring suit. The defendants argued that the five year statute of limitations began running when the fraud was complete in 2002, and thus the SEC’s civil penalty claim was time barred. The district court agreed and dismissed the claim. The Second Circuit reversed, accepting this SEC’s argument that because the violations sounded in fraud, the “discovery rule” applied. The discovery rule states that a claim does not accrue until the claim is discovered, or could have been discovered with reasonable diligence, by the plaintiff. The Supreme Court reversed, holding that the most natural reading of the statute is that a claim accrues, and the statute begins to run, when the fraud is complete and the right to bring suit comes into existence. The Court held that such a reading sets a fixed date when risk of government enforcement ends, which advances the basic purposes of limitations provisions: “repose, elimination of stale claims, and certainty about a plaintiff’s opportunity for recovery and a defendant’s potential liabilities.”