What does Merck & Co. v. Reynolds mean for the future of the statute of limitations defense in securities fraud litigation?

Purpose – The purpose of this paper is to analyze the US Supreme Court's April 27 decision in Merck & Co. v. Reynolds as it affects the statute of limitations defense in securities fraud cases. Design/methodology/approach – The paper explains the background of the Merck opinion, including the limitations period under 28 USC §1658(b)(1) for private securities fraud cases, a District Court dismissal of the original complaint, and a Third Circuit reversal; outlines three principles articulated by the US Supreme Court for applying §1658(b)(1) to securities fraud claims; and discusses what the Merck decision means for private securities fraud litigation. Findings – The Merck decision is likely to affect private securities fraud litigation in several ways, most of which will benefit plaintiffs, who will argue that their claims are not time‐barred because the two‐year statute‐of‐limitations clock begins to run later. Originality/value – The paper provides practical guidance by experienced securities lawyers.