Charged with this mission and armed with these weapons, the SEC as enforcer is a far cry from the defrauded victim the discoveryrule evolved to protect.
The discoveryrule exists in part to preserve the claims of victims who do not know they are injured and who reasonably do not inquire as to any injury.
Instead, courts have developed the discoveryrule, providing that the statute of limitations in fraud cases should typically begin to run only when the injury is or reasonably could have been discovered.
Viewing the DiscoveryRule as something of an equalizer designed to assist wronged parties seeking recompense, the Court was not compelled to offer such assistance to regulators seeking not compensation but punishment aimed at wrongdoers.
On appeal, the United States Supreme Court noted that it had never applied the DiscoveryRule in a matter where the plaintiff is the government bringing an enforcement action for civil penalties, in contradistinction to a defrauded victim seeking recompense.
In declining to extend the DiscoveryRule to government civil penalty enforcement actions, the Court cast the government as a unique plaintiff often tasked with rooting out fraud and armed with many arrows in its quiver just for such an undertaking.
Might the same thing happen with the relatively recent discovery of the supposed 20-year rule, leaving investors to wait for even longer before their shares beat bonds?