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(The news featured below is a selection from the news covered in Federal Securities Law Reporter, which is distributed to subscribers of Federal Securities Law Reporter.) 8th Circuit: Sarbanes-Oxley Did Not Revive Claim

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The 8th U.S. Circuit Court of Appeals held that the lengthened statute of limitations for securities fraud actions created by the Sarbanes-Oxley Act did not revive an expired claim. The court found that the limitations claim was barred under the one-year time period of the previous statute, which had expired before enactment of the Sarbanes-Oxley Act extension.

The injured shareholders claimed that the effective date provisions in the Sarbanes-Oxley Act clearly set forth a congressional intent to apply the statute of limitations retroactively. While the suit was not commenced until after the new statute of limitations took effect, the panel declined to read the act as an express statement of congressional intent to revive stale claims. The court emphasized that the statute failed to use explicit language authorizing retroactive application, and that a "literal reading of the Sarbanes-Oxley Act's effective date would lead to a puzzling result" as "stale claims filed prior to July 30, 2002, would not be revived, whereas claims filed on or after July 30, 2002, would be revived." The court also rejected the investors' contention that the statute of limitations was merely procedural in nature and that a retroactive effect would not impair any rights, increase liabilities or impose new duties.