People v. Credit Suisse Securities (USA) LLC

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Claims brought under the Martin Act, N.Y. Gen. Bus. Law 23-A, 352 et seq., are governed by the three-year statute of limitations in N.Y. C.P.L.R. 214(2) rather than the six-year limitations period in either N.Y. C.P.L.R. 213(1) or 213(8). The Attorney General commenced this action asserting that the issuance of residential mortgage-backed securities by Defendants violated the Martin Act. Defendants moved to dismiss the complaint, arguing that the action was time-barred because the operative statute of limitations was the three-year period found in N.Y. C.P.L.R. 214(2), which covers actions to recover upon a liability, penalty or forfeiture created or imposed by statute. Supreme Court denied the motion to dismiss, concluding that the six-year limitations period in N.Y. C.P.L.R. 213 applied because Plaintiff sought to impose liability on Defendants based on the common-law tort of investor fraud. The Appellate Division affirmed. The Court of Appeals reversed, holding that because the Martin Act expands liability for fraudulent practices beyond that recognized under the common law, section 214(2) controls. View "People v. Credit Suisse Securities (USA) LLC" on Justia Law