That is, the “violation” upon which plaintiffs were bringing suit under the Securities Act was solicitation and “he statute of limitations runs for one year ‘after the violation upon which it was based.’” (quoting 15 U.S.C. The Court further held that no equitable doctrine permitted imposition of a discovery rule and therefore all claims related to tokens purchased bought more than a year before filing suit were time barred.Īs for Section 12(a)(1) claims related to two tokens purchased within one year of the filing of the lawsuit, the Court held that these were time barred as well because the only route by which plaintiffs could bring these claims would be by contending the defendants were statutory sellers under a solicitation theory and they only alleged solicitation acts that occurred more than one year before the suit was brought. With respect to the statute of limitations, the Court held, as others have before it, that claims under Section 12(a)(1) of the Securities Act must be brought within one year after the at-issue tokens are purchased. Instead, defendants argued that the claims were barred by the statute of limitations and Morrison. Similar to other cases like this one, the question of whether the various tokens at issue are securities under Howey was not litigated at the motion to dismiss stage. In particular, like Roche and Selendy’s other exchange cases and like Risley below, plaintiffs alleged that Binance operates as an unregistered exchange and broker dealer and also issues unregistered securities, violating Sections 12(a)(1) of the Securities Act and 29(b) of the Exchange Act. The Second Amended Complaint considered on this motion to dismiss was 327 pages and included 154 causes of action under the Securities Act, Exchange Act, and state Blue Sky laws. Thereafter, plaintiffs’ attorneys voluntarily withdrew numerous actions but continued with this one against Binance. Judge Hellerstein dismissed the suit against Bprotocol in February 2021 and Judge Cote dismissed the suit against Bibox in April 2021. This is an important decision and order by Judge Carter dismissing one of the last of the 11 suits filed jointly by Roche Freedman LLP and Selendy Gay Elsberg PLLC in April 2020 against token issuers and exchanges for issuing and transacting in unregistered securities.
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