Credit Suisse Securities (USA) LLC v. Simmonds

Credit Suisse Securities (USA) LLC v. Simmonds, 566 U.S. 221 (2012), is a United States Supreme Court decision regarding the limitation period for insider trading claims.[1][2] The court ruled in an 8-0 unanimous opinion that the limitation period was subject to traditional equitable tolling. Chief Justice John Roberts recused himself from the case.

Credit Suisse Securities (USA) LLC v. Simmonds
Argued November 29, 2011
Decided March 26, 2012
Full case nameCredit Suisse Securities (USA) LLC, et al., Petitioners v. Vanessa Simmonds
Docket no.10-1261
Citations566 U.S. 221 (more)
132 S. Ct. 1414; 182 L. Ed. 2d 446; 80 U.S.L.W. 4269
Case history
Prior638 F.3d 1072 (9th Cir. 2010); cert. granted, 564 U.S. 1036 (2011).
SubsequentOn remand, 678 F.3d 1139 (9th Cir. 2012).
Holding
Normal equitable tolling principles apply to the statute of limitations for lawsuits under § 16 of the Securities Exchange Act of 1934.
Court membership
Chief Justice
John Roberts
Associate Justices
Antonin Scalia · Anthony Kennedy
Clarence Thomas · Ruth Bader Ginsburg
Stephen Breyer · Samuel Alito
Sonia Sotomayor · Elena Kagan
Case opinion
MajorityScalia, joined by Kennedy, Thomas, Ginsburg, Breyer, Alito, Sotomayor, Kagan
Roberts took no part in the consideration or decision of the case.
Laws applied
Securities Exchange Act, 1934

Background

In 2007, Vanessa Simmonds, a recent college graduate, simultaneously filed lawsuits against fifty five financial institutions accusing them of abuses during the internet firm IPOs from 1999-2001 that eventually led to the dot com bust.[3] Amongst her lawyers was her father David Simmonds who had earlier successfully argued a similar case against an internet start-up. The plaintiffs argued that the financial institutions violated section 16(b) of the Securities Exchange Act of 1934 by not disclosing so-called "short-swing" profits, that is profits from trades occurring over a period of less than six months. A federal district court consolidated the nearly identical cases and granted a motion to dismiss, stating that the two year limitation on the period on Section 16(b) had expired. On appeal, the United States Court of Appeals for the Ninth Circuit reversed the decision, stating that the two-year period was tolled until the "insider" or party benefitting from the profit had disclosed the transaction.[4]

Supreme Court

The Supreme Court, in a majority opinion written by Justice Scalia remanded and vacated the lower court's decision, ruling that the limitations period for Section 16(b) was subject to traditional equitable tolling.[2]

See also

References
  1. Credit Suisse Securities (USA) LLC v. Simmonds, 566 U.S. 221 (2012).
  2. Kaufhold, Steven (March 28, 2012). "Opinion analysis: Occupying the "reasonable middle ground" on tolling of insider trading claims". SCOTUS Blog. Retrieved 31 January 2013.
  3. Grunbaum, Rami (November 4, 2007). "Vanessa vs. the dot-com IPO giants". Seattle Times. Retrieved 31 January 2013.
  4. Simmonds v. Credit Suisse Sec. (USA) LLC, 638 F.3d 1072 (9th Cir. 2010).
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