The opinion of the court was delivered by: DUFF
BRIAN BARNETT DUFF, UNITED STATES DISTRICT JUDGE.
The complaints allege that Poder, in his former position as treasurer of the Village and custodian of the two pension funds, used assets of the two funds to engage in unauthorized transactions -- specifically, repurchase agreements -- in government securities, and that by executing these transactions Chicorp violated § 10(b) of the Securities Exchange Act of 1934 ("§ 10(b)"), 15 U.S.C. §§ 78j(b), and Securities and Exchange Commission Rule 10b-5 ("Rule 10b-5"), 17 C.F.R. § 240.10b-5, as well as Illinois statutory and common law.
On December 8, 1988 Judge Marshall denied Chicorp's motion to dismiss most of the federal securities laws and Illinois common law claims. He granted the motion, however, on one of the Firefighters' Fund's § 10(b) and Rule 10b-5 claims, and on the plaintiffs' common law claims for unjust enrichment, and statutory claims under Ill.Rev.Stat. ch. 85, para. 902. The court found that because the plaintiffs had alleged both a duty on Chicorp's part to disclose Poder's unlawful trading to the trustees of the pension funds, as well as an intentional failure to abide by that duty, the complaints sufficed at the pleading stage to sustain claims for securities fraud, common law fraud, negligence and wanton and willful conduct. At the same time, however, the court dismissed a § 10(b) and Rule 10b-5 claim predicated on alleged misrepresentations by Chicorp to Poder, because no specific allegations of fraud were set forth in the pleadings. He also dismissed the unjust enrichment claims on the grounds that unjust enrichment is a remedy, not a distinct cause of action under Illinois law. Finally, he dismissed the plaintiffs' para. 902 claims, ruling that the state statute was not intended to regulate financial institutions such as Chicorp and that, in any event, there was no private right of action under the statute.
After Judge Marshall ruled, the case was transferred to this court. The parties have now moved this court to reconsider portions of the earlier ruling, and to clarify other portions of it. The court will address the motions in turn.
The Village's and the Police Fund's Motions to Reconsider Judge Marshall's Dismissal of the para. 902 Claims
The Village and the Police Fund have moved this court to reconsider Judge Marshall's dismissal of their claims under para. 902 -- that is, Count X of the Village's complaint and Count VIII of the Police Fund's first amended complaint. Paragraph 902 provides:
No public agency may purchase or invest in instruments which constitute repurchase agreements, and no financial institution may enter into such an agreement with or on behalf of any public agency unless the instrument and the transaction meet [certain requirements not relevant here].
Judge Marshall dismissed the plaintiffs' claims under this statute on the grounds that:
The statute regulates government agencies when they enter into repurchase agreements, but it does not purport to govern dealers that sell the securities involved. Further, the statute does not create a private cause of action for its volation.
The Village of Arlington Heights v. Poder, No. 88 C 3855, slip op. at 9-10 (N.D. Ill. December 8, 1988).
The plaintiffs object to both parts of the court's ruling. They first argue that the statute on its face clearly regulates both government agencies and financial institutions. They then argue that, under Illinois standards for implied rights of ...