An investment bank cannot recover for legal malpractice against Morrison & Foerster because, even though the law firm allegedly missed a central fact while doing public-stock-offering due diligence, the bank’s malpractice claim was time-barred after it didn’t act on a public report about fraud committed by the coal company making the stock offering, an appeals court has ruled.

A New York Appellate Division, First Department panel has found that Brean Murray, Carret & Co., a boutique investment bank, could have brought a malpractice lawsuit against Morrison & Foerster in 2011, when a public report confirmed Puda Coal Inc.’s fraudulent transfers of ownership of Shanxi Coal, but launching the legal action in 2016 was too late.