The question of whether "inquiry notice" for claims under the Securities Act of 1933 survived the U.S. Supreme Court's decision in Merck & Co. v. Reynolds, which rejected inquiry notice for Section 10(b) claims under the Securities Exchange Act of 1934, was recently addressed by the U.S. Court of Appeals for the Third Circuit in Pension Trust Fund for Operating Engineers v. Mortgage Asset Securitization Transactions. Largely following the Supreme Court's analysis for Exchange Act claims in Merck, the Third Circuit rejected inquiry notice for Securities Act claims as well.1 To date, no other circuit court has considered this issue.
Not long ago, however, the issue was squarely before the U.S. Court of Appeals for the Second Circuit in Freidus v. Barclays Bank PLC. The district court in Barclays held that inquiry notice remains the appropriate standard for determining when the statute of limitations commences for Section 11 and 12 claims under the Securities Act, reasoning that Merck involved only Section 10(b) and neither the Supreme Court nor the Second Circuit have extended Merck's holding to claims under the Securities Act.
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