The U.S. Supreme Court on Monday ruled that a large California public pension fund waited too long to sue a collection of banks that underwrote billions in debt securities offered by Lehman Brothers, the investment bank that collapsed at the height of the 2008 financial crisis.

In a 5-4 decision, the justices upheld a federal appeals court decision that had previously rejected the lawsuit.

The California Public Employees' Retirement System, or CalPERS, the largest public pension fund in the U.S., initially joined a class action lawsuit filed in 2008 asserting that the underwriting banks for certain Lehman Brothers securities offerings in 2007 and 2008 included "material misstatements or omissions" about Lehman's accounting practices.

The fund subsequently decided to file a separate lawsuit, in 2011, which it continued pursuing even after the class action settled. CalPERS argued that the "timely" filing of the class-action complaint meant it had begun the action before the statute of limitations expired.

But the highest court disagreed, siding instead with a lower court ruling last year that the Securities Act of 1933 bars claims against a security made later than three years after it's first offered to the public.

Lehman Brothers was forced into bankruptcy in September 2008 after U.S. regulators failed to orchestrate a rescue of what was, at the time, the fourth-largest investment bank in the U.S. Its failure froze global credit markets, eventually spurring billions of dollars in bailouts as the Bush administration and Congress worked to shore up the financial system.

The underwriters included ANZ Securities, a unit of Australia and New Zealand Banking Group, BBVA  (BBVA) - Get Report , Royal Bank of Canada (RBC) - Get Report and France's BNP Paribas as well as several other banks.

Tom Gorman, partner at Dorsey & Whitney LLP and a former senior counsel in the Securities and Exchange Commission's enforcement division, suggested that the court decision puts a strong limitation on lawsuits. "It may make it more difficult for shareholders to bring cases against securities offerings," Gorman said.

In a statement, CalPERS said it was disappointed with the decision. Nevertheless, the fund said it has recovered $28.9 million from a number of defendants involved in the sale of Lehman bonds, "substantially more" than it would have obtained in the class-action lawsuit.

"We will continue our efforts to hold accountable those parties whose actions during the financial crisis harmed CalPERS," it said.