On September 17, the U.S. Court of Appeals for the Third Circuit held that the one-year statute of limitations in section 13 of the 1933 Securities Act establishes a discovery standard for evaluating timeliness, but held that claims brought by a putative class of investors in certain mortgage backed securities (MBS) still were untimely. Pension Trust Fund for Operating Engineers v. Mortg. Asset Securitization Transactions, Inc., No. 12-3454, 2013 WL 5184064 (3rd Cir. Sept. 17, 2013). The investors claimed that a mortgage securitizer made material omissions and misstatements in the offering and sale of certain MBS. On appeal, the court agreed with the investors that they need not plead compliance with the Section 13 statute of limitations and that the district court erred when it determined the claims to be untimely based on its holding that an inquiry standard applied to the statute of limitations. The court held that the discovery standard announced by the U.S. Supreme Court’s in Merck & Co. v. Reynolds, 130 S.Ct. 1784 (2010), in which the Court rejected the Third Circuit’s application of an inquiry standard under the Securities Exchange Act of 1934 and instead applied a discovery standard, also applies to the Securities Act. However, the court held that the investors, based on “storm warnings” they acknowledged existed more than a year before they filed their claims, could have conducted a reasonably diligent investigation earlier that would have yielded the same results as their later investigation that led to the filing of the action. The court concluded that the investors’ claims therefore were untimely and affirmed the district court’s dismissal.