The Mystery Continues: IUL Proprietary Indices Challenged in RICO Suit
January 28, 2025 by Irma Reboso Solares
Since the enactment of the Racketeer Influenced and Corrupt Organizations (RICO) Act, it has been invoked in civil litigation with mixed results. Congress did not intend for RICO to become a surrogate for plaintiffs’ state law fraud and breach of contract claims. As the Third Circuit Court of Appeals observed in Annulli v. Panikkar, “if garden-variety state law crimes, torts, and contract breaches were to constitute predicate acts of racketeering (along with mail and wire fraud), civil RICO law, which is already a behemoth, would swallow state civil and criminal law whole.” For this reason, RICO claims are carefully scrutinized, and many courts have declined to apply RICO to consumer disputes, such as class actions alleging racketeering in the unfair, deceptive, or fraudulent sales and marketing of financial products. Although RICO claims are difficult to prove, their broad scope and the potential for treble damages and attorneys’ fees continue to attract plaintiffs, who bring these claims in life insurance and annuity litigation despite limited success.
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