SENATE BILL REPORT

                            SB 5435

AS REPORTED BY COMMITTEE ON LABOR & COMMERCE, FEBRUARY 15, 1993

Brief Description:  Extending time for limitation of actions for unlawful securities transactions to five years.

SPONSORS: Senators Fraser, Moore, Wojahn, Barr, Sutherland, Vognild and Amondson

SENATE COMMITTEE ON LABOR & COMMERCE

Majority Report:  Do pass. 

     Signed by Senators Moore, Chairman; Prentice, Vice Chairman; Amondson, Barr, Cantu, Fraser, McAuliffe, Newhouse, Pelz, Prince, Sutherland, and Vognild.

Staff:  Benson Porter (786‑7470)

Hearing Dates: February 10, 1993; February 15, 1993

BACKGROUND:

A civil action must be brought within three years for an aggrieved person to recover from a fraudulent or deceitful securities practice or a violation of certain securities registration provisions.  The three-year period begins when the person discovers the violation or would have discovered the violation by the exercise of reasonable care.  Similarly, the statute of limitations for a civil cause of action for fraud is three years from the time the person discovered the facts constituting a fraud.

Some interest has been expressed in extending the statute of limitations for civil actions based on violations of the securities code.

SUMMARY:

The statute of limitations is extended to five years for civil actions based on fraudulent securities practices or violations of certain securities registration provisions.

Appropriation:  none

Revenue:  none

Fiscal Note:  none requested

TESTIMONY FOR:  None

TESTIMONY AGAINST:

An extended statute of limitations will increase exposure to legitimate operators, increasing their costs of doing business.

TESTIFIED:  Walt Corneille, IAFP (con)