in our order that suggest that plaintiffs are alleging common-law fraud.
It is undisputed that the 1-and 3-year statute of repose adopted in Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 111 S. Ct. 2773, 115 L. Ed. 2d 321 (1991), bars all claimed violations of the Securities Exchange Act of 1934 that are based on violations occurring prior to August 2, 1979. VALIC's current confusion apparently stems from our conclusion that not all violations occurred prior to August 2, 1979. Indeed, we held that later reinvestments of interest constitute "purchases" capable of supporting separate and independent violations of § 10(b) and Rule 10b-5. Otto, slip op. at 5-6. The import of this conclusion is rudimentary. At root, our holding can be summarized as follows: (1) any Count I claim based on a purchase occurring prior to August 2, 1979, is time-barred; (2) any Count I claim based on a purchase not occurring prior to August 2, 1979, is not time-barred. Contrary to VALIC's contention, we did not hold that "subsequent (and timely) alleged violations operate to revive claims of class members which are based on untimely purchases." Defendants' Motion to Amend at 3 (emphasis in original). To be sure, we offer the following paradigm: To the extent that Otto's initial purchase on October 17, 1975, constitutes a violation of § 10(b) and Rule 10b-5, action on that violation is time-barred. On the other hand, to the extent that each of Otto's additional reinvestments of interest befalling on or after August 2, 1979, constitutes a violation of § 10(b) and Rule 10b-5, action on that violation is not time-barred.
VALIC is correct in noting that Otto currently does not maintain a common-law fraud claim against defendants. Although Count VI of the amended complaint initially contained a fraud claim, it was abandoned by Otto in the Final Pretrial Order filed April 2, 1991. Presently, three counts remain: (1) Count I (federal securities claims); (2) Count IV (conspiracy to violate the 1934 Securities Act); and (3) Count V (breach of contract). Accordingly, our order dated November 8, 1991, is hereby amended to so reflect. It is so ordered.
MARVIN E. ASPEN
United States District Judge
© 1992-2004 VersusLaw Inc.