SEC v. Cohen et al., U.S. District Court, Eastern District of New York, No. 17-00430
On July 13, a federal judge dismissed a U.S. Securities and Exchange Commission (SEC) lawsuit accusing two former executives of Och-Ziff Capital Management Group LLC (OZCM) of paying foreign bribes. In SEC v. Cohen, the court found that the SEC’s claims were time-barred under 28 U.S.C. § 2462 because the SEC’s claims had all “accrued more than five years before the SEC filed suit” and sought “relief that is at least partly penal, not solely remedial.” Cohen highlights new limitations that the SEC may face in pursuing enforcement actions in the wake of the Supreme Court’s ruling in Kokesh v. S.E.C., 137 S. Ct. 1635 (2017), including that claims for injunctive relief may be time-barred under § 2462. Because parties may raise a limitations defense even after entering a tolling agreement, paying close attention to the terms of tolling agreements, as well as the applicability of the statute of limitations to each type of relief, could lead to the dismissal of SEC claims as time-barred.
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