Supreme Court Decision Alert - March 26, 2012

Originally published March 26, 2012

Today the Supreme Court issued one decision, described below, of interest to the business community.

Securities Law—Section 16(b)—Statute of Limitations

Credit Suisse Securities (USA) LLC v. Simmonds, No. 10-1261 (previously discussed in the June 27, 2011 Docket Report).

Section 16(b) of the Securities Exchange Act of 1934 allows shareholder derivative lawsuits against statutorily defined "insiders" who have profited from "short-swing" transactions. In addition to defining a short-swing transaction as a coupled purchase and sale, or sale and purchase, completed within six months, the statute provides that "no such suit shall be brought more than two years after the date such profit was realized." 15 U.S.C. § 78p(b). To facilitate the identification of improper trades, Section 16(a) requires insiders to report to the SEC transactions involving relevant securities. Today, in Credit Suisse Securities (USA) LLC v. Simmonds, No. 10-1261, the Supreme Court unanimously rejected the Ninth...