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To: Patherzen who wrote (89)	4/14/1999 3:16:00 PM
From: TradeOfTheDay	Read Replies (1) \| Respond to of 737

winstim.com July 3, 1997 RICO Claim Allowed Despite Contract's Choice Of Foreign Law Public Policy Prevents Parties From Avoiding RICO Parties cannot escape the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§1961-68 (RICO), through contractual choice-of-law provisions, the U.S. Court of Appeals for the Ninth Circuit recently ruled. Govett Am. Endeavor Fund Ltd. v. Trueger, 112 F.3d 1017, 1021-22 (9th Cir. 1997). The court stated that RICO is an embodiment of federal public policy and, therefore, any contractual provisions precluding its application are void as against public policy. Id. Corporation Sued Director And Companies He Controlled For RICO And Securities Fraud The American Endeavor Fund, Limited (American Endeavor) was a corporation formed under the laws of the Bailiwick of Jersey, Channel Islands. American Endeavor claimed that one of its directors, Arthur Trueger (a U.S. citizen residing in California), and three companies controlled by him had misappropriated funds and had induced American Endeavor to invest in various California ventures in exchange for kickbacks from those ventures. American Endeavor sued under RICO, the Securities Act of 1933 (the 1933 Act), the Securities Exchange Act of 1934 (the 1934 Act), and California state law. The investment advisory and management contracts between American Endeavor and the three companies were all governed by Jersey law. A federal district judge granted the defendants' motion to dismiss, noting that American Endeavor and the defendants had signed agreements choosing Jersey law to govern their contracts. Since Jersey law does not include RICO, the district court stated that it lacked subject matter jurisdiction over the plaintiff's RICO-based causes of action.