Docket nos. 10-1261 | ||
Full case name Credit Suisse Securities (USA) LLC, et al., Petitioners v. Vanessa Simmonds Citations 566 U.S. ___ (more)
638 F. 3d 1072 Majority Scalia, joined by Alito, Kennedy, Thomas, Ginsburg, Kagan, Sotomayor, Breyer | ||
Credit Suisse Securities (USA) LLC v. Simmonds, 566 U.S. ___ (2012), is a United States Supreme Court decision regarding the limitation period for insider trading claims. 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.
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. 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 ove 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 Appeals court for the 9th 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.
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.