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NCJRS Abstract

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NCJ Number: 78845 Find in a Library
Title: Securities Fraud and RICO (Racketeer Influenced and Corrupt Organizations) (From Techniques in the Investigation and Prosecution of Organized Crime - Materials on RICO, P 154-210, 1980, G. Robert Blakey, ed. See NCJ-78839)
Author(s): N Flaherty
Date Published: 1980
Page Count: 57
Document: PDF
Type: Report (Study/Research)
Format: Document
Language: English
Country: United States of America
Annotation: The application of the Racketeer Influenced and Corrupt Organizations Act (RICO) to securities fraud is discussed.
Abstract: In securities fraud cases, the RICO law provides greater penalties for the perpetrator and greater monetary recovery for the victim than do the securities laws. Under RICO, defendants face a maximum criminal penalty of 20 years in prison, a fine of $25,000, or both. Offenders would also forfeit any interest obtained through securities fraud (the profits) or any interest or security in a business operated or controlled by securities fraud. RICO mandates that successful civil plaintiffs shall recover a monetary amount that triples their actual losses. Recovery of attorney fees is mandated rather than subject to a judge's discretion. A civil court could also order the defendants to divest themselves of their interests in the defendant corporation, dissolve the corporation, or obey restrictions on future securities' activities. Recovery of triple damages under RICO requires proof of two instances of securities fraud. Such fraud occurs when a purposeful, knowing, or reckless misrepresentation or omission of a material fact is made in connection with an actual sale or purchase of securities. After securities fraud is established, the plaintiff must also satisfy the RICO law's requirements. The acts of fraud must emanate from an enterprise that affects interstate commerce, be connected by a common scheme, and fall within the time limits of law. The case of King v. United States (10th Cir. 1976) is presented to illustrate the application of RICO to securities fraud. A total of 215 footnotes are listed. (Author summary modified)
Index Term(s): Case studies; Federal law violations; Racketeer Influenced and Corrupt Organizations (RICO) Act; Securities fraud
Note: Available in microfiche from NCJRS as NCJ-78839.
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