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The Supreme Court will decide how long the Securities and Exchange Commission can wait before suing fund executives for securities fraud.

The high court on Tuesday agreed to hear an appeal from Gabelli Funds LLC executives Bruce Alpert and Marc J. Gabelli. They were sued by the SEC in 2008 for allegedly committing securities fraud by allowing a hedge fund to rapidly trade shares of a mutual fund. Gabelli and Albert say a five-year statute of limitations started no later than 2002, when they stopped the practice. They say investigators missed their chance to sue them.

The SEC argued it didn't discover the practice until late 2003, which put the 2008 lawsuit within the time limit. The 2nd U.S. Circuit Court of Appeals agreed that the time limit starts with discovery of the practice.

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