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Re: wj2005 post# 32011

Monday, 02/24/2020 11:10:51 PM

Monday, February 24, 2020 11:10:51 PM

Post# of 32163
Time is running out for a plaintiff to file a case. If I'd lost a lot of money I would certainly file. Consider this case:

Federal law provides that a securities fraud claim "may be brought not later than the earlier of (1) 2 years after the discovery of the facts constituting the violation; or (2) 5 years after such violation."2 In Strategic Diversity, the lawsuit had been filed within the five-year limitation period; the dispute was whether the May 2007 lawsuit was time-barred because it had been filed outside the two-year "discovery" limitation period.

The plaintiff had purchased $250,000 worth of defendant Alchemix's common stock in July 2002. The plaintiff had made that stock purchase after receiving from the defendant corporation's founder a June 2002 memorandum outlining a sizable, potential third-party investment in Alchemix. The plaintiff claimed that he did not actually discover the allegedly fraudulent misrepresentations and omissions that induced him to purchase the stock – that is, the facts underlying his cause of action – until at least December 2005, when he learned that the sizable third-party investment never materialized, the Alchemix board had resigned, and the defendant corporation's founder had been a defendant in a separate 2002 securities fraud action in state court.

The district court found that the June 2002 memorandum placed the plaintiff on "inquiry notice"—the moment in time when the plaintiff should have begun investigating possible claims. Consequently, the district court ruled that the statute of limitations began to run at the time of inquiry notice, that is, June 2002. Because the May 2007 lawsuit had not been filed within two years of June 2002, the district court found the securities claims time-barred and granted summary judgment against the claims.

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