Supreme Court Seems Skeptical of SEC's Civil Suit Power

Agency wants to make its own rules on when statute of limitations applies

The U.S. Supreme Court on Tuesday appeared poised to curtail the power of the top federal securities regulator to seek civil penalties when it takes a long time to conduct fraud investigations.

In oral argument, justices from across the ideological spectrum sharply questioned a government lawyer arguing for the U.S. Securities and Exchange Commission over how to interpret a law requiring the agency to seek such penalties within five years.

The case involved whether the SEC waited too long to sue mutual fund manager Marc Gabelli and his colleague Bruce Alpert, chief operating officer of Gabelli Funds LLC, over a client's questionable trades.