The plaintiff can take advantage of the defendant`s fear by asking the defendant to cooperate in another way. Thus, under the toll agreement, the applicant could require the defendant to provide documents and/or answer questions about the litigation. Finally, the SEC has enormous influence when it asks companies to enter into toll agreements. Companies know, if they do not agree, that they are given unreasonable time to respond to summonses and other requests for investigation, they will likely have only a limited amount of time at the end of the investigation to defend themselves or negotiate an acceptable settlement, and they will likely be considered uncopy in general. It is no exaggeration that some companies would probably agree to sign almost everything with respect to time delays, in order to avoid these consequences. But the systematic use of retroactive toll agreements would allow me to use private contracts by an administrative authority of the executive to decipher the bulk of the statutes of limitations, effectively giving the Agency the power to completely remove the statute if it were so inclined. Maybe it`s legal? For example, last week`s SEC agreement with a global biopharmaceutical company looked at behaviors from a decade ago, with almost all relevant transactions and events more than five years old. And the comparison with another global pharmaceutical company last month was about behaviors that go back four to eight years. Although the SEC`s settlement orders do not say so in these cases, it is likely that at some point the companies signed toll contracts and perhaps a number of them over a period of years. So if you think you might soon be involved in a lawsuit, consider buying some time with a toll contract. You get some of the benefits of a process strategy without any cost.

Cohen has a significant impact on parties entering into toll agreements with the SEC. First, the case emphasizes the importance of carefully offering ice to the language in toll agreements, in order to ensure a clear understanding of what is covered. To the extent that an agreement is ambiguous or overly broad, a court could interpret the agreement, apply it to all claims and limit a party`s limitation periods, thereby exposing the defendants to unexpected claims based on past conduct or arising from other investigations. Please look at my recent July issue of “On SECond Thought… “,which this month deals with a particularly insolent question that I have been thinking about for many years: are the U.S. Stock Markets Commission`s toll agreements really applicable? Please let me know what you think and please click “Subscribe” if you want to read the leading perspectives on winning and being alerted to each new edition.