Statutes of Limitations Applicable to Private Actions under SEC Rule 10b-5: Complexity in Need of Reform

In 1964, the landmark decision of the United States Supreme Court in J.I. Case Co. v. Borak authoritatively established the availability of implied civil actions to redress injuries resulting from violations of SEC antifraud rules and became the springboard for an explosion of litigation based on SEC Rule 10b-5. The result has been that the question is no longer whether an implied civil action exists for violations of Rule 10b-5, but rather the definition of the legal requisites for and the available remedies in civil actions under Rule 10b-5 in a kaleidoscopic variety of factual contexts. The great volume of cases has produced considerable confusion and many unresolved issues with respect to the substantive aspects of civil actions under Rule l0b-5. The purpose of this article is to review the development of the law thus far with respect to this problem, to examine the issues presented, and to focus particular attention on the need and the prospects for reform.