Statutory Interpretation – Securities – Statute of Limitations

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7^th Circuit Court of Appeals

Case Name: Orgone Capital, III, LLC, et al. v. Keith Daubenspeck, et al.

Case No.: 18-1815

Officials: WOOD, Chief Judge, and EASTERBROOK and BRENNAN, Circuit Judges.

Focus: Statutory Interpretation – Securities – Statute of Limitations

Hype and reality can be at odds. This contrast arises often in postmortems on once-fashionable, now-failed investment securities. Hype can raise investors’ hopes and, in turn, capital contributions. But when hype accelerates an investment’s market value beyond its actual worth, a financial bubble is formed.

Fisker Automotive, Inc. was such a bubble, bursting in 2013. Plaintiffs, all purchasers of Fisker securities between 2009 and 2012, assert various claims against defendants, each of whom played roles in Fisker’s early-stage financing, for allegedly misleading investors regarding Fisker’s intrinsic value and imminent collapse. Illinois law provides remedies when securities are sold by means of deceptive and fraudulent practices. But like any civil action, such claims must be timely filed. Our review does not explore the cause of or the defendants’ alleged roles in Fisker’s failure. Rather, we decide whether plaintiffs’ claims fall within the Illinois securities laws, and if so whether their claims are time-barred by Illinois’s three-year statute of limitations for securities-based claims.

Affirmed

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Derek A Hawkins is trademark corporate counsel for Harley-Davidson. Hawkins oversees the prosecution and maintenance of the Harley-Davidson’s international trademark portfolio in emerging markets.