NCJ Number
92969
Journal
University of Kansas Law Review Volume: 31 Issue: 1 Dated: (Fall 1982) Pages: 7-68
Date Published
1982
Length
60 pages
Annotation
Although the number of cases involving securities fraud brought under the civil or criminal remedies provisions of the 1970 Racketeer Influenced and Corrupt Organizations (RICO) Act is very small, this law is a tool of enormous potential power for the defrauded securities plantiff.
Abstract
The RICO remedial base offers the lure of treble damages and attorney's fees and includes orders of dissolution, reorganization, divestiture, and injunction. The constituent elements of the RICO cause of action have not yet been unambiguously determined by the Federal courts, but the existing body of decisions provides a rich medium for nurturing imaginative RICO actions predicated on securities fraud. No connection need be proved to organized crime nor must any special sort of competitive injury be shown. The plaintiff may be able to reap the benefits of collateral estoppel and certainly will benefit from statutes of limitations under RICO that preserve the plaintiff's cause of action longer than do securities enactments. The inclusion of mail fraud as a predicate act may offer a secondary route that frees the plaintiff from some constraints inherent in an action for fraud under Federal securities acts. Furthermore, the plaintiff may have little difficulty in making out a 'pattern of racketeering activity' based on securities fraud, given the liberal definition of 'act' of racketeering activity by the courts. Redefinition of the 'enterprise' concept by the Supreme Court poses the biggest obstacle to the RICO plaintiff. The value of RICO as a tool to assist civil plaintiffs will depend on the attitudes of the courts, and at present they seem determined to adopt a 'go slow' policy. The paper has 422 footnotes. (Author summary modified)