MLSMK Investment Co.: Civil RICO Liability After the Private Securities Litigation Reform Act and Central Bank

In 1970, the US Congress passed the Racketeer Influenced and Corrupt Organizations Act (RICO)' in an attempt to "eradicat[e]" organized crime. In service of that goal, it sought to provide "enhanced sanctions and new remedies to deal with the unlawful activities of those engaged...

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Bibliographic Details
Published in:DePaul business & commercial law journal 2014-01, Vol.12 (2), p.235
Main Author: Thomas, Matthew P
Format: Article
Language:English
Subjects:
Federal court decisions
Federal legislation
Organized crime
Public policy
Racketeering
RICO 1970-US
Sanctions
Scandals
State court decisions
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Summary:In 1970, the US Congress passed the Racketeer Influenced and Corrupt Organizations Act (RICO)' in an attempt to "eradicat[e]" organized crime. In service of that goal, it sought to provide "enhanced sanctions and new remedies to deal with the unlawful activities of those engaged in organized crime." This comment will look at the Second Circuit's restrictive analysis on the RICO Amendment's bar against RICO claims in MLSMK Investment Co. v. JP Morgan Chase & Co, a case stemming from Bernie Madoff's Ponzi scheme." Primarily, the court sought to determine whether the "RICO Amendment bars all RICO claims 'that would have been actionable as fraud in the purchase or sale of securities,' or only RICO claims in cases where that plaintiff could have asserted a fraud claim against the named defendant." This comment will argue that the rule announced in MLSMK is correct on both legal and public policy grounds, despite what its critics have argued.
ISSN:1542-2763