Reference no: EM131675736

Question: 28 USC § 1658 stipulates that claims of "fraud, deceit, manipulation or contrivance" under the Securities Exchange Act of 1934 may be made "two years after the discovery of the facts constituting the violation," or "five years after such violation," depending on which one is earlier. In 1999, the FDA approved a painkiller by Merck named Vioxx. Merck marketed the drug by using claims of safety and minor side effects. However, in 2001 and 2003, the New York Times and Wall Street Journal, respectively, published articles regarding the connection between the drug and heart attacks. Vioxx was taken off the market voluntarily in 2004. In 2003, a lawsuit was brought against Merck, claiming the company violated securities laws by misrepresenting the side effects and risks associated with the drug. On the other side, Merck argued that the two-year limitations period was already over and the case should be dismissed. How do you think the court decided?