In a recent article published on Law.com, Sarah S. Gold and Richard L. Spinogatti conduct a thorough analysis of the issues in In re Merck & Co. Secs. Deriv. & ERISA Litig.., a Third Circuit Court of Appeals case. The Supreme Court granted certiorari in In re Merck to resolve when an investor is on inquiry notice of a potential fraud claim for purposes of determining when the statute of limitaions begins to run..
The authors note that in In re Merck, the Third Circuit held that “an investor is not on inquiry notice of a potential fraud claim until the investor has knowledge of a possible fraud, including scienter.” The authors also note that the Ninth Circuit recently came to a similar conclusion in Betz v. Trainer Wortham & Co., for which a certiorari petition is currently pending.
The article is a good read for anyone interested in securities fraud litigation.