The opinion of the court was delivered by: Nordberg, District Judge.
MEMORANDUM OPINION AND ORDER
This matter is before the court upon defendants Krumhorn and
Smith's motion to dismiss. For the reasons hereinafter stated,
defendants' motion is denied. In 1980 plaintiffs filed a
five-count complaint against K & S Commodities, Inc. ("K & S"),
alleging violations of the fraud provisions of the Commodity
Exchange Act ("CEA"), 7 U.S.C. § 6(b) (Count I), common law fraud
(Count II), negligence (Count III), violation of fiduciary duty
(Count IV) and breach of contract (Count V) (Case No. 80 C 4004).
The bulk of the complaint alleged a fraudulent scheme wherein
plaintiffs were told they could continue trading commodity
futures contracts even though their accounts were undermargined
and in a deficit position. Plaintiffs further alleged that,
suddenly, a short time later, they were told that their accounts
were frozen and all they could do was remove both sides of their
"spread" transactions. As a result, plaintiffs suffered great
losses when they were forced to liquidate their accounts. A
motion to dismiss the action for failure to state a fraud under
the CEA was denied by Chief Judge McGarr on February 25, 1981.
The case was subsequently transferred to this court. Matters
proceeded with various rulings on non-dispositive pre-trial
matters made by this court.
Then, in July of 1984, plaintiffs filed a complaint under the
Racketeer Influenced and Corrupt Organization Act, 18 U.S.C. § 1961-1968
(1984) ("RICO"), based upon the same facts alleged in
their 1980 complaint against K & S. Plaintiffs named Colin Smith,
an account executive at K & S, Donald Schiller, secretary of K &
S, and Morris Krumhorn, chief operating officer of K & S, as
defendants (Case No. 84 C 6009). Plaintiff's RICO claim was found
to be related to plaintiffs' earlier filed complaint and is now
the subject of defendants' motion to dismiss. Defendants claim
that plaintiffs' RICO claim must be dismissed because RICO does
not extend to a violation of the CEA and the claim is barred by
the statute of limitations.
Applicability of RICO to Commodities Fraud
Defendants' first objection, that RICO does not extend to a
violation of the CEA, does not call for dismissal of the
complaint. Paragraphs 1-24 of the complaint describe acts of mail
and wire fraud sufficient to satisfy the statutory requirements
of RICO. The law is clear that a RICO claim may be predicated
upon a claim of nearly any type of fraud. Haroco v. American
National Bank and Trust Co. of Chicago, 747 F.2d 384 (7th Cir.
1984) aff'd, ___ U.S. ___, 105 S.Ct. 3291, 87 L.Ed.2d 437 (1985)
(per curiam). See also Sedima, S.P.R.L., v. Imrex Co., Inc., ___
U.S. ___, 105 S.Ct. 3275, 3287, 87 L.Ed.2d 346 (1985); Schacht v.
Brown, 711 F.2d 1343 (7th Cir.) cert. denied, 464 U.S. 1002, 104
S.Ct. 508, 78 L.Ed.2d 698 (1983). The mail and wire fraud
statutes, violations of which satisfy the "pattern of
racketeering activity" of RICO, 18 U.S.C. § 1961(1) and (5), also
prohibit "any scheme or artifice to defraud." 18 U.S.C. § 1341,
1343 (1984).*fn1 Simply because the fraud alleged in the instant
case involves a claim of fraud in the sale of commodity futures
contracts does not mean that RICO cannot be invoked.*fn2 In fact,
Taylor v. Bear Stearns & Co., 572 F. Supp. 667 (N.D.Ga. 1983),
cited by defendants in support of their position, also indicates
that a RICO claim may exist for fraud in the sale of commodities
futures contracts as long as the acts of fraud are plead with
sufficient particularity. Id. at 683.
Pleading Fraud with Particularity
These paragraphs also demonstrate that defendants' further
objection that plaintiffs have not plead fraud with sufficient
particularity in accordance with Fed.R.Civ.P. 9(b), is without
merit. The paragraphs adequately allege the facts upon which
plaintiffs base their claim of fraud and set forth the facts with
sufficient particularity so as to allow defendants to frame a
responsive pleading. 5 Wright & Miller, Federal Practice and
Procedure §§ 1297-1298 (1969). See Sutliff v. Donovan Companies,
Inc., 727 F.2d 648, 654 (7th Cir. 1984); Schact v. Brown,
711 F.2d 1343, 1352 n. 7 (7th Cir.), cert. denied, 464 U.S. 1002, 104
S.Ct. 508, 78 L.Ed.2d 698 (1983). These paragraphs, alleging use
of the mails and wire in perpetration of the alleged fraud,
sufficiently describe the pattern of racketeering required by
Statute of Limitations Applicable to RICO
Defendants next claim that, even assuming plaintiffs have a
valid RICO claim, it is barred by the statute of limitations. The
RICO statute contains no specific limitations period.
Traditionally, where a federal statute contains no specific
statute of limitations, the federal courts have looked to the
most appropriate limitations period provided by state law.
Johnson v. Railway Express Agency, 421 U.S. 454, 95 S.Ct. 1716,
44 L.Ed.2d 295 (1975); Wilson v. Garcia, 471 U.S. 261, 105 S.Ct.
1938, 85 L.Ed.2d 254 (1985). The Seventh Circuit has stated that
the applicable limitations period is that which a court of the
state where the federal court sits would apply had the action
been brought there. Beard v. Robinson, 563 F.2d 331, 334 (7th
Cir. 1977), cert. denied, 438 U.S. 907, 98 S.Ct. 3125, 57 L.Ed.2d
1149 (1978); see Burnett v. Grattan, 468 U.S. 42, 104 S.Ct. 2924,
82 L.Ed.2d 36 (1984).*fn3 State limitations periods will not be
applied, however, if their application would be inconsistent with
the policies underlying the federal cause of action. Movement For
Opportunity, Etc. v. General Motors, 622 F.2d 1235 (7th Cir.
1980). This final consideration emphasizes "the predominance of
the federal interest" in the borrowing process. Wilson v. Garcia,
471 U.S. 261, 105 S.Ct. 1938, 1943, 85 L.Ed.2d 254 (1985).
The parties have suggested three different limitations periods
to apply to this cause of action. Defendants argue that
plaintiffs' claim is based on a violation of the CEA and
therefore the CEA's statute of limitations must be applied. Since
the antifraud provisions of the CEA do not specify any limitation
period, defendants suggest that the Illinois three-year
limitations period governing securities actions, Ill.Rev.Stat.
ch. 121 1/2, § 137.13(D), is most analogous to the rights
asserted in plaintiffs' claim. Alternatively, defendants argue
that the two-year Illinois statute governing statutory penalties,
Ill.Rev.Stat. ch. 110, § 13-202, should be applied. Defendants
reason that, since RICO provides for treble damages and such
damages are deemed a penalty under Illinois law, this two-year
limitations period would also be appropriate. Plaintiffs, on the
other hand, maintain that Illinois' five-year statute for
common-law fraud, Ill.Rev.Stat. ch. 110, § 13-205, should govern
their RICO claim.
The various state limitations periods suggested by the parties
illustrate the difficulty in determining the proper limitations
period for a civil action under RICO.*fn4 RICO provides a federal
remedy in addition to existing state remedies, and proscribes a
broad range of conduct, thus rendering it difficult to
pidgeon-hole the statute into any one state limitations period.
Recently, in Wilson v. Garcia, 471 U.S. 261, 105 S.Ct. 1938, 85
L.Ed.2d 254 (1985), the Supreme Court was confronted by an
analogous problem: determining a statute of limitations for
lawsuits under 42 U.S.C. § 1983. Like RICO, § 1983 provides a
federal forum for injuries resulting from a broad spectrum of
conduct, and "almost every . . . claim can be favorably
analogized to more than one of the ancient common-law forms of
action, each of which may be governed by a different statute of
limitations." Wilson at 1945. The Wilson court outlined its basic
considerations when determining the appropriate statute of
limitations for a § 1983 claim:
 We must first consider whether state law or
federal law governs characterization of [the] claim
for statute of limitation purposes. . . . [This] is
derived from the elements of the cause of action
and Congress' purpose in providing it. . . .
 If federal law applies, we must next decide
whether all § 1983 claims should be characterized
in the same way, or whether they should be
evaluated differently, depending on the varying