Opinion ID: 502715
Heading Depth: 1
Heading Rank: 3

Heading: The Applicable Limitations Period For The Federal Securities Claims

Text: 12 The Jensens' complaint alleged that the defendants carried out a fraudulent securities scheme involving a series of misrepresentations and omissions concerning, for instance, expected profits; actual losses; the services Hutton, Snellings, and Granada each provided; the necessity of retaining an attorney to manage the investments; and the furnishing of a prospectus. The complaint included claims under Sec. 17(a) of the Securities Act, Sec. 10(b) and Rule 10b-5 of the Securities Exchange Act, Sec. 215 of the Investment Advisers Act, New York Stock Exchange (NYSE) Rule 405, and the National Association of Securities Dealers (NASD) Rules of Fair Practice. Of these securities claims, the Jensens on appeal raise a limitations argument concerning only Sec. 10(b) and Rule 10b-5. Thus, the other federal securities claims raised below are deemed abandoned. See supra note 5, and cases cited therein. 13 Federal securities laws do not specify a limitations period for bringing suit under Sec. 10(b) or Rule 10b-5 of the Securities Exchange Act. Where federal law does not specify a limitations period, federal courts generally borrow the limitations period from the state statute which substantively most resembles the federal action. Agency Holding Corp., --- U.S. at ----, 107 S.Ct. at 2762; Wood v. Combustion Engineering, Inc., 643 F.2d 339, 342 (5th Cir.1981) (quoting McNeal v. Paine, Webber, Jackson & Curtis, Inc., 598 F.2d 888, 891 (5th Cir.1979)). Relying on a long line of cases from our court, the district court held that Louisiana's two-year Blue Sky prescriptive period, contained in La.Rev.Stat.Ann. 51:714, governed actions under Sec. 10(b) and Rule 10b-5. See Dupuy v. Dupuy, 551 F.2d 1005, 1023 n. 31 (5th Cir.), cert. denied, 434 U.S. 911, 98 S.Ct. 312, 54 L.Ed.2d 197 (1977); and Vigman v. Community Nat'l Bank & Trust Co., 635 F.2d 455, 459-60 (5th Cir.1981). See also Davis v. A.G. Edwards & Sons, Inc., 823 F.2d 105, 107 (5th Cir.1987). 14 We find no merit in the Jensens' arguments that La.Civ.Code Ann. art. 1847, which governs nullification of contracts from fraud, or Section 29 of the Federal Securities Exchange Act of 1934, 15 U.S.C. Sec. 78cc, regarding rescission of contracts, most closely resembles Sec. 10(b) and Rule 10b-5. Accordingly, we uphold the district court's determination that the two-year prescriptive period of Louisiana's Blue Sky Statute governs the Jensens' federal securities claims.