Orrick obtained a victory for former Microtune, Inc. general counsel and CFO Nancy Richardson. The Hon. Jane Boyle, United States District Judge for the Northern District of Texas, granted summary judgment to all but a small portion of the Securities and Exchange Commission’s action against Ms. Richardson on the grounds that the case was time-barred under 28 USC Section 2462.

Judge Boyle’s decision stems from a 2008 action that the SEC brought against Microtune, its former CEO and Ms. Richardson alleging that they backdated and improperly accounted for stock option grants to Microtune’s employees between 2000 and 2003.

In its order, the court rejected the “discovery rule” and concluded that any statements made by Ms. Richardson prior to June 30, 2003, were barred by the five-year rule of 2462. It found that the fraudulent concealment/equitable tolling doctrine was inapplicable, largely due to the lack of due diligence. The court also determined that for purposes of Section 2462, penalties included all forms of relief other than disgorgement of proceeds from the exercise and sale of backdated options. Thus, director and officer bars, SOX 304 clawbacks, and even injunctive relief in this case were deemed penal, not equitable, and accordingly, subject to the five-year bar of 2462.

“This decision contains one of the most extensive analyses of the fraudulent concealment/equitable tolling doctrine as applied to 2462,” said Silicon Valley securities litigation and regulatory enforcement partner Susan Resley. She added, “It demonstrates that government agencies have to be diligent in bringing their claims, as a matter of fairness.”

The Orrick team was led by Silicon Valley securities litigation and regulatory enforcement partner Susan Resley, along with Washington, D.C., litigation partner Preston Burton and Silicon Valley litigation partner Ed Davis, as well as San Francisco securities litigation and regulatory enforcement senior associate Justin Lichterman; Washington, D.C., litigation senior associate Zeno Baucus; Washington, D.C., securities litigation and regulatory enforcement associate Becky Mroz and Silicon Valley intellectual property associate Elizabeth McBride.