Broker-Dealer Litigation - Greenberg Traurig LLP

cause of action under RICO. Though civil RICO claims may proceed if they are specifically
asserted against a defendant who had been criminally convicted in connection with the alleged
securities fraud, Intervenor-Plaintiff made no such allegations in her complaint.
Conwill v. Greenberg Traurig, LLP, 2011 WL 1103728 (E.D. La. Mar. 22, 2011).
Plaintiff claimed that defendants made false and misleading statements promising that
plaintiff would legally be able to take tax deductions based on the losses generated in the subject
transaction, which misled him into entering into the transaction in the first instance. Although
plaintiff identified mail and wire fraud as the predicate acts supporting his RICO claim, those
predicate acts were actually allegations of fraud in connection with the sale of securities. Thus,
as the alleged fraud coincided with a purchase of securities and that purchase of securities was
made to further a fraudulent scheme, the claims were actionable as securities fraud and plaintiff
could not rely on them as the basis for a RICO claim.
Baldwin v. Cavett, 2011 U.S. Dist. LEXIS 117755 (E.D. Tex. Sept. 12, 2011).
Plaintiffs filed suit against defendants and their investment advisors asserting a bevy of
claims, including RICO claims, based on poor investment advice that defendants allegedly gave
plaintiffs with the aim of generating greater fees. On defendants’ motion to dismiss, the court
ordered plaintiffs to file a RICO case statement within 14 days, and permitted defendants to
renew their motion to dismiss after plaintiffs’ filing of the case statement.
In re ClassicStar Mare Lease Litigation, 2011 WL 4591927 (E.D. Ky. Sept. 30, 2011).
In this civil suit, the court granted plaintiffs’ motion for summary judgment on their
RICO claims, finding that defendants used the mails and wires over the course of three years to
fraudulently sell investments in a horse-breeding operation that did not have sufficient horses to
breed. Defendants’ main defense was that plaintiffs could not succeed because of the in pari
delicto doctrine, which counsels courts to avoid finding in favor of a plaintiff where both parties
are at roughly equal fault. The court, assuming in pari delicto to be applicable to a civil RICO
claim, found the doctrine to be inapplicable here because defendants did not present evidence
that plaintiffs knew about the problems with the horse-breeding operation when they made their
investments or even well into their participation as investors.
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