Professor David Reiss recently commented on the Justice Department's lawsuit against credit ratings giant Standard & Poor's. In a surprise move, the Justice Department relied on the 1989 Financial Institutions Reform, Recovery, and Enforcement Act, which allows the government to bring claims within five years against companies that have negatively impacted federally insured financial institutions. However, the current crisis, which began in 2007, is now six years old.
Professor Reiss explained to Law360: “If this theory holds up, then we've just seen a five-year extension on the statute of limitations for financial crisis cases... On its face, this seems to fall within the language of the statute — it will be up to the courts to determine if that falls outside the statute's spirit."
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