Full opinion text
MEMORANDUM AND ORDER RAMSEY, District Judge. This matter is before the Court on motions by all defendants to dismiss the second amended complaint, as further amended by interlineation. The motions are made pursuant to Rules 9(b), 12(b)(3), and 12(b)(6) of the Federal Rules of Civil Procedure. Plaintiffs oppose the motions, and have filed memoranda in opposition. Notwithstanding plaintiffs’ request for a hearing, the Court now rules pursuant to Local Rule 6 without oral argument. The positions of all parties have been briefed thoroughly. Factual Background Plaintiffs in this action and in four other cases now pending before this Court, contend that numerous promoters, partnerships, accountants, lawyers, and stockbrokers violated federal and state law in the creation and operation of various coal mining limited partnership tax shelters in the late 1970’s. Plaintiffs assert a myriad of claims for relief ranging from traditional common law fraud to the federal Racketeer Influenced and Corrupt Organizations Act. 18 U.S.C. § 1961 et seq. The second amended complaint, as further amended by interlineation, alleges that in 1976 and in 1977 two investors, Daniel C. Morley, a resident of Maryland, and William T. Evans, a resident of Virginia, purchased units of two limited partnerships, which were involved in coal mining, from a partner of Baker, Watts & Company, a licensed Maryland broker-dealer. Morley purchased a one-half unit of a limited partnership known as Mountainview Associates in October 1976 for $50,000.00 and a full unit of a limited partnership known as Newport Coal Associates in November 1977 for $40,000.00. Evans purchased a full unit of Mountainview Associates in October 1976 for $100,000.00 and two units of Newport Coal Associates for $80,000.00. Mountainview Associates (“Mountain-view”) and Newport Coal Associates (“Newport”) were formed in 1976 and in 1977 respectively, for the stated purpose of mining and selling coal. Plaintiffs allege that it was represented to them that Mountainview had exclusive rights by sublease to mine coal in all seams located on or under approximately 3,500 surface acres of land in Pulaski County, Kentucky. Newport purported to have acquired rights by sublease to mine coal on or under approximately 400 surface acres of land in Leslie County, Kentucky. Investments in Mountainview totaled approximately $2,000,-000.00; in Newport, $1,200,000.00. Both entities had the same general partner: defendant Halajen Mineral Development (“Halajen”), a New York corporation, which is solely owned by defendant Irving Cohen (“Cohen”), a New York resident. The offering circular for Mountainview was prepared by the New York law firm of Weiss, Rosenthal & Schwartzman, P.C. A successor firm, Schwartzman, Weinstock, Garelik & Mann, P.C., and five individual attorneys are sued as defendants (collectively referred to a “SWG & M”). Newport’s circular was prepared by the Florida law firm of DiGuilian, Spellacy & Bernstein. In their present complaint, plaintiffs sue DiGuilian & DiChiara, P.A., a successor firm, and two individual defendants, Zayle Bernstein and Sidney Bernstein. Defendant Marvin F. Rosenbaum (“Rosenbaum”) is alleged to have been the accountant for the Mountainview partnership and to have prepared an opinion with respect to the tax consequences attendant the investment in Mountainview. The seventeen defendants whom plaintiffs added in the second amended complaint are all partners of Baker, Watts & Co. (hereinafter collectively referred to as “Baker, Watts”), the broker-dealer which sold the partnership interests to Morley and Evans. Plaintiffs’ investments in Mountainview and Newport did not result in the tax advantages and other benefits they had anticipated. The Internal Revenue Service audited plaintiffs and assessed additional taxes, penalties, and interest against them as a result of disallowed deductions. Morley and Evans allege that the partnerships did not have the binding mineral leases that they were represented to have had and which were essential to favorable tax treatment. The Securities and Exchange Commission also investigated these partnerships. On January 27, 1981, Cohen, Halajen, and Mountainview consented to the entry of judgments of permanent injunction and other equitable relief. Notwithstanding these judgments, defendant Cohen allegedly represented to the plaintiffs that Mountainview and Newport continued to be viable investments. Plaintiffs also raise numerous other complaints. They contend that the organization fees received by the general partner “had no reasonable relationship to the actual cost anticipated or incurred;” that defendants improperly transferred funds to foreign bank accounts; that plaintiffs omitted several material facts from the offering circular; and that much of what defendants represented was false and misleading. In addition, they allege that their inquiries into the continued viability of the partnerships were met with assurances that all was well. The complaint contains sixteen counts: Count I sues Cohen, Halajen, Mountain-view, and Newport for violations of section 1962(e) of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961 et seq. Count II sues these four defendants and Baker, Watts for violations of sections 5(a), 12(1), and 15 of the Securities Act of 1933, 15 U.S.C. § 77a et seq. Count III sues all defendants for violations of sections 12(2), 15, and 17(a) of the Securities Act of 1933, sections 10(b) and 20(a) of the Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq., and Rule 10(b)(5). Count IV sues Cohen, Halajen, Mountainview, Newport, and Baker, Watts for violations of the registration provisions of the Maryland Securities Law, MD. CORP. & ASS’NS CODE ANN. §§ 11-205, 11-501, and 11-703. Count V sues all defendants for violations of the anti-fraud provisions of the Maryland Securities Law, MD.CORP. & ASS’NS CODE ANN. §§ 11-301, 11-703. Count VI sues all defendants for negligent misrepresentation. Count VII sues all defendants for breach of fiduciary duty. Count VIII sues Cohen, Halajen, Mountainview, and Newport for breach of contract. Count IX sues SWG & M and the individual partners, Schwartzman, Weinstock, Troy, Jacobs, and Fingerman, for professional negligence. Count X sues DiGuilian & DiChiara, P.A. and the Bern-steins for professional negligence. Count XI, which proceeds against Case Engineering Company for professional negligence, has been dismissed because of plaintiffs’ failure to serve this defendant. See supra n. 3. Count XII sues Marvin Rosenbaum, for professional negligence. Count XIII sues Cohen and Halajen for conversion. Count XIV sues Cohen for fraud. Count XV sues Baker, Watts for negligence. Finally, Count XVI sues Baker, Watts for fraud. This Court’s jurisdiction over the RICO claim is premised upon 18 U.S.C. section 1964(c) (civil RICO) and 28 U.S.C. section 1331 (federal question) and 1337 (commerce and antitrust). Jurisdiction over the federal securities laws claims is based upon 28 U.S.C. section 1331 and 1337. Jurisdiction over the state claims is premised upon 28 U.S.C. sections 1331, 1332 (diversity) and 1337. Plaintiffs further seek to invoke this Court’s pendent jurisdiction over the state claims. Only pendent jurisdiction is relevant for the purposes of the state claims and will be discussed below. The requested relief includes recission, actual damages, statutory treble damages under RICO, punitive damages, and costs and expenses of this action, including attorneys’ fees. A jury trial was demanded under Rule 38(b) of the Federal Rules of Civil Procedure. See Paper No. 29. Motions to Dismiss The pending motions to dismiss are directed toward the sufficiency of plaintiffs’ factual allegations under the various counts, as well as several preliminary matters such as lack of jurisdiction and venue. Before the Court are seven motions to dismiss: (1) Motion by defendants Cohen, Halajen, Mountainview, and Newport, to dismiss the amended complaint. Paper No. 28; (2) Motion to dismiss the amended complaint filed by the individual attorney-defendants, Herman Schwartzman, Leonard Weinstock, Bernard Troy, Edward Fingerman, and Howard Jacobs. Paper No. 59; (3) Defendant DiGuilian & DiChiara, P.A.’s motion to dismiss the amended complaint. Paper No. 60; (4) Defendant Schwartzman, Weinstock, Garelik & Mann, P.C.’s motion to dismiss the amended complaint. Paper No. 61; (5) Defendant Sidney A. Bernstein’s motion to dismiss the amended complaint. Paper No. 62; (6) Defendant Zayle A. Bernstein’s motion to dismiss the amended complaint. Paper No. 63; and (7) Defendant Baker, Watts’s motion to dismiss the amended complaint (Paper No. 64) which was later amended. Paper No. 74. The motions filed by the individual attorney-defendants Schwartzman, Weinstock, Troy, Fingerman, and Jacobs and defendant DiGuilian & DiChiara, P.A. primarily incorporate by reference the motions and memoranda of SWG & M. Defendant Sidney Bernstein’s and defendant Zayle Bernstein’s motions essentially incorporate by reference the motions and memoranda of defendant SWG & M and defendants Cohen, Halajen, Mountainview, Newport and Rosenbaum. Plaintiffs have in turn filed extensive memoranda in opposition to all motions. The grant of a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) is appropriate only when “it appears beyond doubt that plaintiff[s] can prove no set of facts in support of [their] claims which would entitle [them] to relief.” Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-102, 2 L.Ed.2d 80 (1957). In ruling upon the pending motion to dismiss, this Court must view the complaint in the light most favorable to plaintiffs and resolve every doubt in their behalf. 5 C. WRIGHT & A. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1357 (1969). Plaintiff’s allegations are to be taken as true for the purpose of ruling upon the pending motion. See id; see also Jenkins v. McKeithen, 395 U.S. 411, 421-22, 89 S.Ct. 1843, 1848-49, 23 L.Ed.2d 404 (1969). Moreover, any inference that may reasonably be drawn or construed from plaintiffs’ complaint shall be considered together with the allegations of fact. Murray v. City of Milford, 380 F.2d 468, 470 (2d Cir.1967); Westray v. Porthole, Inc., 586 F.Supp. 834, 836 (D.Md.1984). Venue The Court first turns to defendants’ motions to dismiss under Fed.R.Civ.P. 12(b)(3) as the starting point for what promises to be a very long judicial journey. Section 1391(b) of Title 28, which governs venue in actions “wherein jurisdiction is not founded solely on diversity of citizenship,” provides that an action “may be brought only in the judicial district where all defendants reside, or in which the claim arose, except as otherwise provided by law.” This section is supplemented by federal statutes under which the first three counts are brought. The Securities Act of 1933, 15 U.S.C. § 77v(a), permits an action to be brought “in the district wherein the defendant is found or is an inhabitant or transacts business, or in the district where the offer of sale took place, if the defendant participated therein____” The Securities Exchange Act of 1934, 15 U.S.C. § 78aa, permits actions “in the district wherein any act or transaction constituting the violation occurred ... or in the district wherein the defendant is found or is an inhabitant or transacts business____” The Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1965(a), restricts actions under RICO to districts “in which such person resides, is found, has an agent, or transacts his affairs.” Under the “co-conspiracy” theory of venue, which is applicable in securities actions such as the one before the Court, “it is not necessary that each defendant named have engaged in acts or transactions in the forum district.” Rose v. Arkansas Valley Environmental & Utility Authority, 562 F.Supp. 1180, 1211 (W.D.Mo.1983), quoting Warren v. Bokum Resources Corp., 433 F.Supp. 1360, 1364 (D.N.M.1977). The act of a single defendant is deemed to be the act of all the defendants and accordingly will establish venue as to all defendants in that district. Schreiber v. W.E. Hutton & Co., 382 F.Supp. 297, 299 (D.D.C.1974). The act need not form “the core of the claim,” but must be “something more than an immaterial part of the claim.” Warren, supra, at 1363-64. See, e.g., Mariash v. Morrill, 496 F.2d 1138 (2d Cir.1974) (mailing of a tender offer); Clapp v. Stearns & Co., 229 F.Supp. 305, 307 (S.D.N.Y.1964) (telephone call). Venue is proper in this district with respect to Counts II and III because important steps in the execution and consummation of the alleged fraudulent scheme occurred in Maryland. All defendants were the intended beneficiaries of alleged acts including inducements to purchase the partnership units, the signing of the subscription agreements, and the later representations as to the partnerships’ viability. Venue is also proper under RICO. Section 1965(a)’s inclusion of “has an agent” permits this Court to retain venue in this action. The Baker, Watts defendants were “agents” not only in the selling of the units, but also in the alleged fraudulent scheme. See Van Schaick v. Church of Scientology of California, Inc., 535 F.Supp. 1125 (D.Mass.1982); King v. Vesco, 342 F.Supp. 120, 123 (N.D.Cal.1972). In addition, the Court notes that, if the allegations of the complaint are to be believed, then defendants “transacted their affairs” in this district. See 18 U.S.C. § 1965(a). Accordingly, defendants’ motions to dismiss under Rule 12(b)(3) will be denied. Count I Count I seeks treble damages, costs, and attorneys’ fees from defendants Cohen, Halajen, Mountainview, and Newport for alleged violations of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 et seq. (1982). Defendants attack the RICO claim on several fronts including (1) expiration of the statute of limitations; (2) failure to properly plead the essential elements of a RICO claim; and (3) failure to plead the elements of a RICO claim with the particularity required by Fed.R.Civ.P. 9(b). Predictably, plaintiffs, contend that defendants’ arguments are without merit. The Court will address these arguments seriatim. 1. Statute of Limitations Enacted as part of the Organized Crime Control Act of 1970, RICO provides for both criminal and civil penalties. 18 U.S.C. §§ 1963 & 1964. Criminal prosecutions under RICO are subject to the general federal five-year statute of limitations contained in 18 U.S.C. § 3282 (1982). See, e.g., United States v. Cody, 722 F.2d 1052, 1056 (2d Cir.1983), cert. denied, — U.S. -, 104 S.Ct. 2678, 81 L.Ed.2d 873 (1984). The civil provisions of RICO, however, do not specify a particular limitations period. 18 U.S.C. § 1964. Under these circumstances, the general rule is that where a federal statute provides for a federal cause of action but does not contain an applicable limitations period, the federal courts are required to “borrow” an analogous statute of limitations from the forum state. UAW v. Hoosier Cardinal Corp., 383 U.S. 696, 704-05, 86 S.Ct. 1107, 1112-13, 16 L.Ed.2d 192 (1966); O’Hara v. Kovens, 625 F.2d 15, 17 (4th Cir.1980), cert. denied, 449 U.S. 1124, 101 S.Ct. 939, 67 L.Ed.2d 109 (1981). In O’Hara, the Fourth Circuit enunciated several principles directly applicable to the present case. Chief Judge Haynsworth concluded: When borrowing a state statute of limitations for federal purposes, a court should look to the statute which most clearly addresses the same or similar policy considerations as are addressed by the federal right being asserted. It is not necessary that the state statute operate in the same fashion as the federal scheme, nor is it necessary that the state statute describe a cause of action identical to the federal cause at issue. There simply must be a commonality of purpose between the federal right and the state statutory scheme so that it is reasonable to subject the federal implied right to the statute of limitations provided by state law. 625 F.2d at 18 (citations omitted). Apparently, the issue of which Maryland statute of limitations is most analogous to a RICO claim is a question of first impression in this district. Therefore, unconstrained by precedent, both parties urge this Court to adopt the state provision that is most beneficial to their respective case. Plaintiffs argue in favor of the three-year period for common fraud. See MD.CTS. & JUD.PROC.CODE ANN. § 5-101 (1984). Plaintiffs maintain that because their RICO claim is premised on defendants’ acts of securities fraud, mail fraud, and wire fraud, the most analogous state claim is one for common law fraud. See Kirschner v. Cable/Tel Corp., 576 F.Supp. 234, 241 (E.D.Pa.1988). Defendants, on the other hand, argue that the “RICO cause of action is nothing more than an attempt to collect treble damages for the securities laws violations alleged in the balance of the complaint,” and should therefore be time-barred if the securities claims are time-barred. Defendants urge the Court to apply the same statute of limitations to the RICO claim as is applicable to the paramount underlying predicate act. Several factors militate against application of the statute of limitation for the predicate acts to the substantive RICO claim. First: RICO is a federal law proscribing various racketeering acts which have an effect on interstate or foreign commerce. Certain of those racketeering, or predicate acts violate state [and federal] law and RICO incorporates the elements of those state [and federal] offenses for definitional purposes. State [and federal] law offenses are not the gravamen of RICO offenses. RICO was not designed to punish state [or federal] law violations; it was designed to punish the impact on commerce caused by conduct which meets the statute’s definition of racketeering activity. To interpret state [or federal] law offenses to have more than a definitional purpose would be contrary to the legislative intent of Congress and existing state [and federal] law. United States v. Forsythe, 560 F.2d 1127, 1135 & n. 11 (3d Cir.1977) (citations omitted); see also Moran, Pleading a Civil RICO Action under Section 1962(c): Conflicting Precedent and the Practitioner’s Dilemma, 57 TEMP.L.Q. 731, 737-38 (1984) (hereinafter cited as Pleading Civil RICO). In short, RICO does not provide a remedy for the mere commission of the predicate acts. Rather, RICO prohibits the use of the predicate acts to invest in, acquire or maintain an interest in, or conduct the affairs of, an enterprise whose activities affect interstate commerce. 18 U.S.C. § 1962. “Commission of two or more predicate acts is but an element of a § 1962 violation; those acts do not themselves constitute the § 1962 violation.” Bankers Trust Company v. Rhoades, 741 F.2d 511, 516 (2d Cir.1984). Accordingly, there is no commonality of purpose between RICO and the statutory scheme encompassing the predicate acts. They are not designed to punish the same offenses. Cf. Seawell v. Miller Brewing Company, 576 F.Supp. 424, 427 (M.D.N.C.1983). But see Kirschner v. Cable/Tel Corp., 576 F.Supp. 234, 241 (E.D.Pa.1983). Second, pertinent case law indicates that the statutes of limitations for the predicate acts have no bearing on the validity of a RICO claim. Several courts have considered whether the expiration of the limitations periods on the predicate acts precludes a criminal RICO prosecution. These courts have concluded that the expiration is not a bar to prosecution under RICO. See, e.g., United States v. Licavoli, 725 F.2d 1040, 1047 (6th Cir.), cert. denied, — U.S. -, 104 S.Ct. 3535, 82 L.Ed.2d 840 (1984); United States v. Malatesta, 583 F.2d 748, 758 (5th Cir.1978), cert. denied, 440 U.S. 962, 99 S.Ct. 1508, 59 L.Ed.2d 777 (1979); United States v. Davis, 576 F.2d 1065, 1066-67 (3d Cir.), cert. denied, 439 U.S. 836, 99 S.Ct. 119, 58 L.Ed.2d 132 (1978). While these cases concerned criminal RICO prosecutions, their teachings are equally applicable to civil RICO cases inasmuch as the same basic elements must be established in either case. 18 U.S.C. § 1962 (1982). Thus, the viability of a civil RICO claim should not be premised upon the timeliness of the predicate acts. Finally, subjecting civil RICO claims to the statute of limitations of the predicate acts represents an unworkable solution in all but a few cases. The statutory definition of “racketeering activity,” 18 U.S.C. § 1961(1), contains a laundry list of federal and state offenses. Unless the two alleged predicate acts are closely related, as in the present case, it is unlikely that both acts would be subject to the same statute of limitations. Under these circumstances, the federal court would be saddled with the unenviable task of selecting one of two disparate limitations periods. Defendants would solve this dilemma by requiring the court to determine which predicate act predominates the complaint. Such a process would be arbitrary at best, and this Court is unwilling to engage in such capricious selections. The Court must therefore look elsewhere for the most analogous Maryland statute of limitations. Careful consideration of the various Maryland statutes of limitations indicates that the relevant state statute is MD.CTS. & JUD.PROC.CODE ANN. § 5-101, which provides that “[a] civil action at law shall be filed within three years from the date it accrues____” Several factors support the selection of section 5-101. First, it is directly applicable to civil actions at law which encompasses a civil RICO claim. Second, the three-year period is sufficiently long to permit plaintiffs to pursue their federal rights, but not so long as to permit them to press stale claims. Finally, the use of the three-year period for all RICO claims brought in this district, regardless of the nature of the underlying predicate acts, will establish a degree of uniformity which is highly desirable given the other complexities of RICO. Indeed, at least one commentary has suggested the uniform application of state “catch-all” or “statutory-liability” periods to civil RICO claims. See Smith, Flanagan & Pastuszenski, The Statute of Limitations in a Civil RICO Suit for Treble Damages, TECHNIQUES IN THE INVESTIGATION OF ORGANIZED CRIME, 974, 1033-34 (G.R. Blakey ed. 1980); see also Seawell v. Miller Brewing Company, 576 F.Supp. 424, 427 (M.D.N.C.1983) (applying statutory liability period). Although, under section 5-101, plaintiffs were required to file suit within three years from the date their cause of action accrued, both federal and Maryland law provide that when a party is kept in ignorance of a cause of action by the fraud of an adverse party, the cause of action is deemed to accrue at the time the party discovered or should have discovered the fraud by the exercise of ordinary diligence. See Seawell, supra at 427; MD.CTS. & JUD.PROC.CODE ANN. § 5-203 (1984). In the present case, plaintiffs have alleged that defendants’ fraud kept them in ignorance of their claims, including the RICO claim, until May 1983. Defendants maintain that plaintiffs knew or should have known of the alleged fraud in February 1981. Assuming arguendo that the February 1981 date is correct, plaintiffs’ RICO claim is nevertheless timely inasmuch as it was filed in December 1983, two months before the expiration of the three-year period. 2. Pleading a Civil RICO Claim Having concluded that the RICO claim was timely filed, the Court next turns to the sufficiency of plaintiffs’ RICO pleadings. As a preliminary matter, it is necessary to delineate the essential elements of a RICO claim under section 1962(c). Plaintiffs must allege that the defendants: (1) were employed by or associated with (2) an enterprise (3) engaged in, or the activities of which affect, interstate or foreign commerce, and (4) that the defendants conducted or participated in the conduct of the enterprise’s affairs (5) through a pattern of racketeering activity. See Haroco, Inc. v. American National Bank and Trust Company, 747 F.2d 384, 387 (7th Cir.1984), cert. granted, — U.S. -, 105 S.Ct. 902, 83 L.Ed.2d 917 (1985); Moss v. Morgan Stanley, Inc., 719 F.2d 5, 17 (2d Cir.1983), cert. denied sub nom., Moss v. Newman, — U.S.-, 104 S.Ct. 1280, 79 L.Ed.2d 684 (1984). To invoke RICO’s civil remedies, plaintiffs must further allege that they “were injured in [their] business or property by reason of [defendants’] violation of section 1962(c)....” 18 U.S.C. § 1964(c); see Moss v. Morgan Stanley, Inc., supra, 719 F.2d at 17. A. “Enterprise” In United States v. Turkette, 452 U.S. 576, 590, 101 S.Ct. 2524, 2532, 69 L.Ed.2d 246 (1981), the Supreme Court determined that the enterprise element included both legitimate and illegitimate enterprises. In reaching this conclusion, the Court set forth several important principles which are applicable to the case at bar. The majority concluded that an enterprise is an entity whose members are “associated together for a common purpose of engaging in a course of conduct.” Id. at 583, 101 S.Ct. at 2528. The enterprise’s existence is established by “evidence of an ongoing organization, formal or informal, and by evidence that the various associates function as a continuing unit.” Id. Finally, the enterprise must be an entity separate and distinct from the pattern of racketeering activity in which it engages. Id; see also United States v. Bledsoe, 674 F.2d 647, 665 (8th Cir.), cert. denied, 459 U.S. 1040, 103 S.Ct. 456, 74 L.Ed.2d 608 (1982). The Fourth Circuit, in United States v. Griffin, 660 F.2d 996 (4th Cir. 1981), cert. denied, 454 U.S. 1156, 102 S.Ct. 1029, 71 L.Ed.2d 313 (1982), also established several principles regarding the enterprise element which are particularly applicable to the instant case, court concluded that where There the the RICO enterprise charged is not a legal entity, but merely a ‘group of individuals associated in fact,’ the purpose of the association, along with the composition of the group, would seem essential to proof of such an entity’s separate existence. Id. at 999. In the present case, a liberal reading of plaintiff’s RICO claim indicates that the enterprise element has been sufficiently pled to withstand defendants’ motion to dismiss. While plaintiffs’ RICO claim is rather poorly drafted, it cannot be said that they can prove no set of facts regarding the existence of an enterprise which would entitle them to relief. See Conley v. Gibson, supra, 355 U.S. at 45-46, 78 S.Ct. at 101-102. Paragraph 85 of the amended complaint adequately alleges that Cohen, Halajen, Mountainview, and Newport were an “association-in-fact” type enterprise as defined in 18 U.S.C. section 1961(4). Each of the defendants named in Count I were associated together for the common purpose of marketing and selling Mountainview and Newport securities. The enterprise was an ongoing organization separate and distinct from the pattern of racketeering activity in which it allegedly engaged. Thus, the requirements of Turkette and Griffin have been met with respect to the enterprise element. Moreover, because each of the defendants in Count I is alleged to have been a member of the “association in fact” enterprise, each defendant is necessarily alleged to have been associated with the enterprise. This satisfies the “employed by or associated with” element outlined above. B. Interstate Commerce The pleadings contain ample allegations of a nexus between the enterprise and interstate commerce. Cohen is a New York resident; Halajen is a New York corporation; Mountainview and Newport are both New York limited partnerships. Complaint UU 9-12. Mountainview and Newport were organized for the purpose of leasing coal rights in Kentucky. Complaint j[j[ 28 & 43. Limited partnership units in Mountainview and Newport were offered for sale in several states, including Maryland. Complaint j[ 31. These units were purchased by a Maryland resident (Morley) and a Virginia resident (Evans). Complaint jfjf 7 & 8. Taken as a whole, these allegations adequately demonstrate that the enterprise engaged in interstate commerce within the meaning of RICO. C. Conducted, or Participated in the Enterprise’s Affairs It has recently been determined that “the doctrines of respondeat superior and vicarious liability, normally applicable in the criminal realm, are equally applicable in RICO cases, whether the remedy sought is criminal or civil.” Heffron Company, Inc. v. Seafarers’Maryland Building Corporation, No. HAR-83-3724, slip op. at 18 (D.Md. Feb. 26, 1985) (Report and Recommendation of Magistrate Frederic N. Smalkin). Thus, a corporation or partnership can be held liable under RICO for the acts of its agents and/or representatives committed within the scope of their authority. See H. HENN & J. ALEXANDER, LAWS OF CORPORATIONS AND OTHER BUSINESS ENTERPRISES, at 483 (3d ed. 1983). In the present case, Cohen is allegedly the sole shareholder and president of Halajen and the general partner of Mountainview and Newport. Complaint j[ 9. In these positions, Cohen had authority to market and sell limited partnership units in Mountainview and Newport. As such, the alleged fraudulent acts of Cohen, committed while marketing and selling the securities, are imputed to Halajen, Mountainview, and Newport. Therefore, Cohen, Halajen, Mountainview, and Newport each conducted or participated in the conduct of the enterprise’s affairs within the meaning of RICO. See Bernstein v. IDT Corporation, 582 F.Supp. 1079, 1083 (D.Del.1984). D. Through a Pattern of Racketeering Activity RICO defines “pattern of racketeering activity” as requiring “at least two acts of racketeering activity, one of which occurred after the effective date of this chapter [October 15, 1970] and the last of which occurred within ten years ... after the commission of a prior act of racketeering activity.” 18 U.S.C. § 1961(5). Section 1961(1) delineates a myriad of offenses which are included within the term “racketeering activity.” For purposes of the present action, the applicable offenses are contained in section 1961(1)(B) which provides: “any act which is indictable under ... [18 U.S.C.] section 1341 (relating to mail fraud), [18 U.S.C.] section 1343 (relating to wire fraud),” and 1961(1)(D) which provides: “any offense involving ... fraud in the sale of securities____” Essentially, plaintiffs maintain that defendants used the mail and wire services to transmit the false statements and omissions, all of which furthered defendants’ fraudulent sale of securities. Thus, the affairs of the enterprise — the sale of Mountainview and Newport securities — were allegedly conducted through a pattern of racketeering activity — mail, wire, and securities fraud. It is clear that these allegations are sufficient to withstand defendants' motion. Defendants raise one argument with respect to this element which merits discussion, albeit brief. Defendants maintain that plaintiffs must show that defendants have been convicted of the predicate acts to establish a “pattern of racketeering activity.” This argument has generally been rejected by those courts which have addressed the issue. Recently, however, the Second Circuit endorsed the “convictions requirement” in Sedima, S.P.R.L. v. Imrex Company, Inc., 741 F.2d 482 (2d Cir.1984), cert. granted, — U.S.-, 105 S.Ct. 901, 83 L.Ed.2d 917 (1985). In their supplemental memorandum in support of the motions to dismiss, defendants ask this Court to adopt the Sedima reasoning. Contrary to defendants’ assertions, however, this Court cannot follow Sedima in light of the recent Fourth Circuit opinion in Battlefield Builders, Inc. v. Swango, 743 F.2d 1060 (4th Cir.1984). In reversing the district court’s granting of defendants’ motion to dismiss, Chief Judge Winter concluded that plaintiff must allege two acts of extortion within a ten year period after October 15, 1970, in order to formulate a complaint which will withstand a motion under Rule 12 for dismissal for failure to state a claim upon which relief can be granted. Id. at 1061 (emphasis added). The court reasoned that for purposes of the case, “a pattern of racketeering activity is established if defendants are alleged to be guilty of both extortion and attempted extortion.” Id. at 1063 (emphasis added). The Fourth Circuit’s conclusion that mere allegations are sufficient, implicitly, if not explicitly, rejects any requirement that defendants be convicted of the predicate acts. This Court, like the court in Heffron, is “of the opinion that if faced directly with the question of whether civil RICO liability requires proof of criminal conviction of the predicate acts, the Fourth Circuit would reject the Sedima reasoning.” Heffron, supra, at 24. This Court, therefore, will not require allegations of criminal convictions. See Wang Laboratories, Inc. v. Burts, 612 F.Supp. 441 at 447, 448 (D.C.Md.1985) (Northrop, J.) But see Spinelli, KehiayanBerkman, S.A. v. Gruner, 602 F.Supp. 372 (1985) (Young, J.) (distinguishing Battlefield Builders and following Sedima). E. Injury by Reason of a Violation of Section 1962 Heretofore, the Court has concluded that plaintiffs’ allegations are sufficient to plead a violation of RICO. Plaintiffs must, however, clear one last hurdle to avoid dismissal. Plaintiffs must further allege that they were “injured in [their] business or property by reason of the [defendants’] violation of section 1962[c]----” 18 U.S.C. § 1964(c). A growing number of courts have seized upon the “by reason of” language of the Act to impose a variety of restrictions on RICO claims. Although these restrictions have varying judicial designations, including competitive injury, commercial injury, indirect injury, and racketeering injury, the common thread running through each restriction is a requirement that the plaintiff must suffer some injury beyond those injuries directly caused by the predicate acts. See Haroco, Inc. v. American National Bank & Trust Company, 747 F.2d 384, 391-393 (7th Cir.1984), cert. granted, — U.S. -, 105 S.Ct. 902, 83 L.Ed.2d 917 (1985); Note, Civil RICO and “Garden Variety” Fraud — A Suggested Analysis, 58 ST. JOHN’S L.REV. 93, 105-11 (1983) (arguing against the adoption of these requirements). Defendants urge this Court to adopt the racketeering injury requirement recently made popular by the Second Circuit in Bankers Trust Company v. Rhoades, 741 F.2d 511, 516 (2d Cir.1984), and Sedima, supra, 741 F.2d at 496. In Sedima, the court concluded that to establish a racketeering injury a plaintiff must “show injury different in kind from that occurring as a result of the predicate acts themselves, or not simply caused by the predicate acts, but also caused by an activity which RICO was designed to deter.” Sedima, supra, at 496. Neither the Sedima nor Bankers Trust panels, however, endeavored to provide a workable definition of a “racketeering injury.” Indeed, no court which yet has recognized the racketeering injury requirement has been able to define it. See Alexander Grant and Company v. Tiffany Industries, Inc., 742 F.2d 408, 413 (8th Cir.1984). Several courts, desirous of limiting the scope of RICO but unable to define racketeering injury, have simply concluded that they will know it when they see it. See, e.g., Willamette Savings & Loan v. Blake & Neal Finance Co., 577 F.Supp. 1415, 1430 (D.Ore.1984). The inability of courts to define a racketeering injury, together with the broad remedial purposes and intent of RICO, leads this Court to reject any requirement that plaintiffs must establish an injury separate and distinct from those injuries caused by the predicate acts. Accord Windsor Associates, Inc. v. Greenfeld, 564 F.Supp. 273, 278-79 (D.Md.1983). In reaching this conclusion, the Court finds the reasoning of Judge Cardamone’s dissents in Sedima and Bankers Trust, as well as the Seventh Circuit opinion in Haroco, supra, particularly persuasive. In Haroco, the court reasoned that the imposition of the racketeering injury requirement “reduces RICO’s civil provisions to a trivial remedy, available in only a tiny fraction of RICO violations and dependent upon entirely fortuitous facts.” Haroco, supra, at 398; see also Sedima, supra, at 510 (Cardamone, J., dissenting). Before this Court would permit such a significant segment of persons to escape the otherwise broad reach of RICO, “there should be, at least, unmistakable support in the history and structure of the legislation.” See Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 756, 95 S.Ct. 1917, 1935, 44 L.Ed.2d 539 (1975) (Powell, J., concurring). The Court finds no such unmistakable support for the imposition of a racketeering injury requirement. Therefore, this Court, like others in this district, will not require a separate racketeering injury. See Heffron, supra, at n. 19; Windsor Associates, supra, at 278-79. 3. Pleading Fraud in Connection with RICO Claim Finally, defendants argue that plaintiffs’ failure to plead the fraudulent predicate acts (securities fraud, mail fraud, and wire fraud) in accordance with the particularity requirement of Fed.R.Civ.P. 9(b), warrants dismissal of the RICO claim. Rule 9(b) provides that “[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity.” Fed.R.Civ.P. 9(b). To the extent plaintiffs allege fraudulent predicate acts under section 1961, Rule 9(b) is applicable to those allegations. See Haroco, supra, at 404-405; Moss v. Morgan Stanley, supra, at 19. However, Rule 9(b) must be read in conjunction with Rule 8 which contains the provisions creating the ‘notice’ pleading which is the hallmark of the federal rules. Rule 9(b) requires more than mere notice in cases of fraud; nevertheless, it is not to be construed and applied in a vacuum devoid of Rule 8’s existence. Oliver v. Bostetter, 426 F.Supp. 1082, 1089 (D.Md.1977). Thus, plaintiffs must “allege sufficiently specific facts to put the defendants] on notice of what the plaintiffs charge [they] did and the misrepresentations and omissions by which [they] did it.” Id. In the present case, the RICO allegations satisfy Rule 9(b) in all respects. Plaintiffs’ amended complaint sets forth several omissions and misrepresentations upon which they base their claim. The complaint adequately alleges that the Mountainview and Newport offering memoranda falsely represented that the partnerships had obtained leasehold rights to the coal properties in time to qualify for favorable tax treatment and misrepresented the extent of the coal deposits to be mined by the partnerships. Complaint 40, 51, 70, & 72. Several other omissions and mistatements have been alleged, including misappropriation of funds by Cohen and the felony conviction of defendant Rosenbaum. Complaint 73 & 74. Taken as a whole, these allegations provide defendants with ample notice of the fraudulent acts constituting the predicate acts for the RICO claim. Moreover, plaintiffs have specified the role of Cohen in the fraudulent scheme, and as the agent or representative of Halajen, Mountain-view, and Newport, his fraudulent acts performed within the scope of his authority are attributable to the other entities. Thus, the role of each defendant under Count I has been set forth with the requisite particularity. See Himelrich, Pleading Securities Fraud, 43 MD.L.REV. 342, 357 (1984). In sum, the Court concludes plaintiffs have (1) sufficiently pleaded compliance with the three-year statute of limitations for RICO claims; (2) sufficiently pleaded all elements of a RICO claim; and (3) sufficiently pleaded fraud in connection with the predicate acts to satisfy Fed.R.Civ.P. 9(b). Accordingly, defendants’ motion to dismiss Count I will be denied. Count II Count II of plaintiffs’ amended complaint alleges a violation of sections 5(a), 12(1), and 15 of the Securities Act of 1933. 15 U.S.C. §§ 77e, 77Z(1) & 77o (1982). Each of these sections concerns the sale of unregistered securities and fixes liability upon the offeror or seller of such unregistered securities or upon a person controlling an offeror or seller of unregistered securities. Count II is directed against defendants Cohen, Halajen, Mountainview, Newport, and Baker, Watts. In their motions to dismiss, defendants maintain that all of the causes of action in Count II are barred by the limitations periods contained in section 13 of the Securities Act of 1933. 15 U.S.C. § 77m (1982). It is therefore necessary, as a threshold matter, to determine the statute of limitations applicable to each of the claims in Count II. Section 13 of the Securities Act of 1933 provides: No action shall be maintained to enforce any liability created under section 77k or 771 (2) of this title unless brought within one year after the discovery of the untrue statement or the omission, or after such discovery should have been made by the exercise of reasonable diligence, or, if the action is to enforce a liability created under section 111(1) [12(1)] of this title, unless brought within one year after the violation upon which it is based. In no event shall any such action be brought to enforce a liability created under section 77k or 77Z(1) [12(1)] of this title more than three years after the security was bona fide offered to the public, or under section 111(2) of this title more than three years after the sale. 15 U.S.C. § 77m (1982). Thus, the limitations periods applicable to section 12(1) claims are one year from the date of the violation, and in no event, more than three years after the security was bona fide offered to the public. The one and three year provisions are cumulative, not alternative. LeCroy v. Dean Witter Reynolds, Inc., 585 F.Supp. 753, 760 (E.D.Ark.1984); Osborne v. Mallory, 86 F.Supp. 869, 873-74 (S.D.N.Y.1949); III. Loss, SECURITIES REGULATION, ch. ll(c)(l)(f)(i) (2d ed. 1961) (hereinafter cited as III. Loss). Plaintiffs must establish that their section 12(1) claim was brought within one year of the alleged violation and within three years of the date the securities were bona fide offered to the public. See LeCroy, supra. Sections 5(a) and 15, while not specifically addressed in section 13, have nevertheless been interpreted to fall within the auspices of the one and three year limitations periods. See Herm v. Stafford, 663 F.2d 669, 679 (6th Cir.1981); LeCroy, supra, at 757-58; Sasso v. Koehler, 445 F.Supp. 762, 763 (D.Md.1978). This interpretation is premised upon the relationship between sections 5, 12, and 15. Section 12(1) imposes liability upon any person who “offers or sells [an unregistered] security in violation of section 5.” 15 U.S.C. §111 (1) (1982). Similarly, “since the liability of the controlling person [under section 15], is joint and several with the controlled person, the same limitations period logically applies to the controlling person.” Herm v. Stafford, supra at 679. In short, for purposes of the Count II claims for violations of section 5(a), 12(1), and 15, plaintiffs must plead and prove facts tending to show that the present action was commenced within one year of the violation upon which it is based and not more than three years after the security was bona fide offered to the public. Although neither party has addressed the issue, it is important to determine when a security is “bona fide offered to the public” within the meaning of section 13. Several courts have addressed this issue and have differed as to whether it is the date the securities were first offered to the public or the date they were last offered. Compare LeCroy, supra, at 760 (first offered) with In Re Bestline Products Securities and Antitrust Litigation, [1974-75] CCH Fed.Sec.L.Rep. H 95,070 (S.D.Fla.1975) (last offered). Although the difference appears minor, it can have substantial adverse consequences, including the expiration of a plaintiffs cause of action under section 12(1) before the cause of action actually accrues, After careful consideration of the relevant authorities, the Court is persuaded that the three-year statute of limitations commences to run on the date the securities were first bona fide offered to the public. The clear weight of the authority supports this interpretation. See, e.g., LeCroy, supra, at 760 & n. 4; Morse v. Peat, Marwick, Mitchell & Co., 445 F.Supp. 619, 620 (S.D.N.Y.1977). Indeed, Professor Loss, in his treatise on securities regulation, concludes that the language of section 13 “presumably ... means first offered to the public.” III. Loss, supra, at 1742 (emphasis in original). The Court next turns to the application of the limitation period to the instant case. Neither the complaint nor plaintiffs reply memoranda to defendants’ motion sets forth the date upon which the Mountainview and Newport securities were first offered to the public. However, for purposes of the motion to dismiss, the Court will assume that plaintiffs were the first investors in Mountainview and Newport, and that the statute of limitations began to run in October 1976 on the Mountainview purchases and in November 1977 on the Newport purchases. The present action was commenced on December 7, 1983. It is readily apparent, therefore, that plaintiffs’ claims for violation of sections 5, 12(1) and 15 are barred by the three-year statute of limitations. The present suit was instituted more than seven years after the first bona fide offering of the Mountainview securities and more than six years after the first bona fide offering of the Newport securities. Nevertheless, plaintiffs urge this Court to apply the federal equitable tolling doctrine to toll the statute of limitations. “Federal law has long held that where fraud is involved in an action, at law or in equity, the statute of limitation is tolled.” Mid-Carolina Oil, Inc. v. Klippel, 526 F.Supp. 694, 697 (D.S.C.1981), affd, 673 F.2d 1313 (4th Cir.), cert. denied, 457 U.S. 1107, 102 S.Ct. 2906, 73 L.Ed.2d 1315 (1982) (citing Holmberg v. Armbrecht, 327 U.S. 392, 66 S.Ct. 582, 90 L.Ed. 743 (1946)). The doctrine is invoked primarily in two situations: where fraud forms the basis of the federal cause of action; and where other non-fraud-based federal causes of action have been concealed by the tortfeasor. In practical effect, the doctrine tolls the running of the applicable limitations period until the fraud or fraudulent concealment is (or should have been) discovered by the plaintiff. LeCroy, supra, at 758 (citations omitted); see Vanderboom v. Sexton, 422 F.2d 1233, 1240 (8th Cir.), cert. denied, 400 U.S. 852, 91 S.Ct. 47, 27 L.Ed.2d 90 (1970). “The doctrine, however, must be applied in the light of the particular facts and circumstances____” LeCroy, supra, at 758. In the instant action, several factors militate against the application of the doctrine. First, the causes of action under sections 5, 12(1), and 15 are not themselves in the nature of fraud. See LeCroy, supra, at 758-59; Ingenito v. Bermec Corporation, 441 F.Supp. 525, 553 n. 26 (S.D.N.Y.1977). Thus, plaintiffs must show that defendants fraudulently concealed the fact that the Mountainview and Newport securities were not registered. Cf. Ingenito, supra. Here, plaintiffs have made several allegations with respect to defendants’ fraudulent concealment of material facts. Upon close inspection, however, it is clear that none of the allegations concern the concealment of the fact the securities were unregistered. Indeed, the subscription agreements for Mountainview and Newport securities each contained a specific provision informing the investor that the securities had not been registered under the Securities Act of 1933. (Cohen Affidavit Exhibits D-G.) Morley and Evans each signed a subscription agreement for Mountainview and Newport securities, and are therefore charged with the knowledge that the securities were unregistered. Second, several courts have concluded that the three-year limitations period contained in section 13 is absolute, and the normal tolling rules are not applicable to toll the three-year period. See, e.g., Admiralty Fund v. Hugh Johnson & Co., Inc., 677 F.2d 1301, 1308 (9th Cir.1982); Summer v. Land & Leisure, Inc., 664 F.2d 965, 968 (5th Cir. 1981), cert. denied, 458 U.S. 1106, 102 S.Ct. 3485, 73 L.Ed.2d 1367 (1982); Brick v. Dominion Mortgage & Realty Trust, 442 F.Supp. 283, 291 (W.D.N.Y.1977). The unambiguous language of section 13 persuades this Court that the three-year period represents the outside limits for instituting suit under sections 5, 12, and 15, and expiration of that period precludes the application of the equitable tolling doctrine. Accordingly, the claims under sections 5(a), 12(1), and 15 are time-barred and will be dismissed. Count III Count III of the amended complaint proceeds against all defendants and alleges violations of sections 12(2), 15, and 17(a) of the Securities Act of 1933, 15 U.S.C. §§ 771 (2), 77o, & 77q(a) (1982); and §§ 10(b), 20(a) of the Securities Exchange Act of 1934, 15 U.S.C. §§ 78j(b) & 78t (1982); and Rule 10(b)(5). Defendants maintain that each of these alleged causes of action is time-barred by the applicable statute of limitations. Defendants further assert that Fourth Circuit case law establishing the existence of a private cause of action under section 17(a) of the 1933 Act should be reevaluated in light of recent Supreme Court decisions limiting judicial implication of private causes of action. Turning first to the limitations issue, the Court concludes that plaintiffs’ actions under section 12(2) and 15 are time-barred under section 13, 15 U.S.C. § 77m (1982). Section 13 provides that no action under section 12(2) may be brought more than one year after the discovery of the untrue statement or omission, or after such discovery should have been made by the exercise of reasonable diligence. Section 13 further provides that in no event shall an action under section 12(2) be maintained more than three years after the sale. As previously noted, plaintiffs must plead compliance with both the one-year and three-year provisions to state a claim under section 12(2). See LeCroy, supra, at 760; Osborne v. Mallory, 86 F.Supp. 869, 873-74 (S.D.N.Y.1949); III. Loss, supra, at 1742 n. 188. In the present case, plaintiffs have failed to adequately plead compliance with the three-year limitations period. The sale of Mountainview and Newport securities took place in 1976 and 1977. This action was instituted in 1983 — more than six years after the sale and more than three years after the expiration of the statute of limitations. Similarly, plaintiffs’ claims under section 15 must also be dismissed for failure to comply with the three-year provision contained in section 13. Although section 13 does not specifically reference section 15, its limitation periods have been held to apply with equal force to section 15 claims. See Herm v. Stafford, 663 F.2d 669, 679 (6th Cir.1981); Sasso v. Koehler, 445 F.Supp. 762, 763 (D.Md.1978). Accordingly, plaintiffs’ section 15 claims are time-barred under the three-year provision. Recognizing the untimeliness of their claims, plaintiffs again argue that the federal equitable tolling doctrine tolls the running of the three-year period until plaintiffs knew or should have known of defendants’ fraud. Plaintiffs maintain that they did not know, nor should have known, of the fraud until 1983. Thus, plaintiffs reason, the present action, filed in 1983, is timely under both the one-year and three-year periods. As previously discussed, however, the three-year period represents the outside limit for bringing suit under sections 12 and 15, and expiration of that period precludes the application of the equitable tolling doctrine. See, e.g., Summer v. Land & Leisure, Inc., 664 F.2d 965, 968 (5th Cir.1981), cert. denied, 458 U.S. 1106, 102 S.Ct. 3485, 73 L.Ed.2d 1367 (1982). Plaintiffs’ remaining Count III claims involve several difficult issues. Neither the Securities Act of 1933, nor the Securities Exchange Act of 1934, provide a statute of limitations for claims under section 17(a) (1933 Act) or sections 10(b), 20(a), and Rule 10(b)(5) (1934 Act). Therefore, the Court is required to apply an analogous statute of limitations of the forum state to the federal claims. Holmberg v. Armbrecht, 327 U.S. 392, 395, 66 S.Ct. 582, 584, 90 L.Ed. 743 (1946); O’Hara v. Kovens, 625 F.2d 15, 17 (4th Cir.1980), cert. denied, 449 U.S. 1124, 101 S.Ct. 939, 67 L.Ed.2d 109 (1981). “The implied absorption of State statutes of limitation within the interstices of the federal enactments is a phase of fashioning remedial details where Congress has not spoken but left matters for judicial determination within the general framework of familiar legal principles.” Holmberg v. Armbrecht, supra, 327 U.S. at 395, 66 S.Ct. at 584. The Fourth Circuit and this Court have concluded that Maryland’s blue sky law is most analogous to the federal securities laws. Thus, the Courts have consistently applied the limitations periods contained in MD.CORPS. & ASS’NS CODE ANN. § 11-703(f) to actions under sections 17(a), 10(b), and Rule 10(b)(5). See, e.g., O’Hara v. Kovens, supra, (§ 10(b)); Fox v. Kane-Miller Corporation, 542 F.2d 915, 918 (4th Cir.1976) (Rule 10(b)(5)); Sasso v. Koehler, 445 F.Supp. 762, 768 (D.Md.1978) (§ 17(a), § 10(b), and Rule 10(b)(5); cf. Newman v. Prior, 518 F.2d 97, 99 (4th Cir.1975) (Virginia blue sky law applicable to § 17(a) claims). Furthermore, because liability of controlling persons under section 20(a) is derived from the liability of the controlled person, the same limitation period should apply to section 20(a) violations as that which applies to those provisions allegedly violated by the controlled person. Cf. Herm v. Stafford, supra. In the present case, therefore, the limitations periods contained in section ll-703(f) also apply to plaintiffs’ claims under section 20(a) of the Securities Exchange Act of 1934. Section ll-703(f) provides in pertinent part: (1) A person may not sue under this section after the earlier to occur of three years after the contract of sale or purchase or (2) ... (ii) ... one year after the discovery of the untrue statement or omission, or after the discovery should have been made by the exercise of reasonable diligence. MD.CORPS. & ASS’NS CODE ANN. § 11-703(f) (1975 & Cum.Supp.1984). Accepting arguendo plaintiffs’ contention that they could not have discovered defendants’ fraud until 1983, plaintiffs claims are nevertheless time-barred under the three-year provision of section 11-703(f)(2)(ii). This suit was instituted more than seven years after the contract of sale of the Mountainview securities and more than six years after the contract of sale of the Newport securities. Plaintiffs again argue, however, that the federal equitable tolling doctrine tolls the running of section ll-703(f) until plaintiffs knew or should have known of defendants’ fraud. Plaintiffs’ argument raises the question: To what extent do federal tolling provisions govern the running of state statutes of limitation “borrowed” for federal actions cognizable only in federal courts? “Without launching into an exegesis on the nice distinctions that have been drawn in applying state and federal law in this area, ... it suffices to say that [plaintiffs have] overstated [their] case.” Johnson v. Railway Express Agency, Inc., 421 U.S. 454, 463, 95 S.Ct. 1716, 1721, 44 L.Ed.2d 295 (1975) (footnotes omitted). Whether or not the federal equitable tolling doctrine generally tolls a state statute of limitations borrowed for a federal cause of action, the doctrine has no application to the facts of this case for several reasons. Section ll-703(f) provides the limitations periods for several provisions of the Maryland blue sky law, including actions for the sale of unregistered securities, section 11-501, and actions for the sale of securities by means of any untrue statement of a material fact, section ll-703(a)(l)(ii). In this respect, section ll-703(f) is strikingly similar to section 13 of the Securities Act of 1933. Indeed, section 13 also provides the limitations period for claims arising from the sale of unregistered securities, section 12(1), and the sale of securities by means of any untrue statement of a material fact, section 12(2). Moreover, the limitations periods contained in both statutes are virtually identical. Actions for the sale of securities by means of an untrue statement of material fact are subject to the one-year and three-year provisions of section 11-703(f) under state law, and the same one-year and three-year provisions of section 13 under federal law. Both statutes commence the running of the one-year period from the date the untrue statement or omission was discovered, or should have been discovered by the exercise of reasonable diligence, and the three-year period from the date of sale. Under both statutes, the one-year and three-year periods are cumulative, not alternative. A cause of action must be timely under both periods or it is time-barred. See LeCroy v. Dean Witter Reynolds, Inc., 585 F.Supp. 753, 760 (E.D.Ark.1984) (section 13); cf. O’Hara v. Kovens, 60 Md.App. 619, 484 A.2d 275, 276-77 (1984) (section ll-703(f)). In the absence of any Maryland decisions interpreting section 11-703© in its present form, the similarity between the state and federal provisions convinces this Court that the decisions interpreting section 13 are relevant to any interpretation of section 11-703©. In particular, the Court is concerned with those decisions which have con-eluded that Congress intended the three-year provision in section 13 to be an absolute limitation, the running of which cannot be tolled by the equitable tolling doctrine. See, e.g., Admiralty Fund v. Hugh Johnson & Company, Inc., 677 F.2d 1301, 1308 (9th Cir.1982); Summer v. Land Leisure, Inc., 664 F.2d 965, 968 (5th Cir.1981), cert. denied, 458 U.S. 1106, 102 S.Ct. 3484, 73 L.Ed.2d 1367 (1982). But see In Re Home-Stake Production Company Securities Utigation, 76 F.R.D. 337, 344-45 (N.D.Okl.1975). The Court concludes, therefore, that the three-year period contained in section 11-703© is also an absolute outside limit on commencing suit under Maryland’s blue sky law. This position is buttressed by the anomalous situation which would result from application of the equitable tolling doctrine to section 11-703©. Essentially, under plaintiffs’ theory, the statute would read: A person may not sue under this section after the earlier to occur of (1) three years after the discovery of the untrue statement or omission, or after the discovery should have been made by the exercise of reasonable diligence; or (2) one year after the discovery of the untrue statement or omission, or after the discovery should have been made by the exercise of reasonable diligence. The absurdity of this interpretation is manifest. It has the effect of rendering the state statute of limitations null and void, inasmuch as the three-year period will never cpme into play. Under the present Gregorian calendar system, one year from discovery will always occur earlier than three years from discovery. The Court cannot and will not countenance a result such as this, which essentially renders the borrowing of the state statute meaningless. Accordingly, the Court concludes that plaintiffs’ claims under sections 17(a), 10(b), and 20(a), and Rule 10(b)(5) are time-barred under the three-year statute of limitation contained in MD.CORPS. & ASS’NS CODE ANN. § 11-703(f). Pendent Jurisdiction Before turning to the state law claims, it is necessary to determine what, if any, effect the dismissal of two of the three federal claims will have upon the Court’s exercise of pendent jurisdiction over the state claims. The lone remaining federal claim is the RICO count. This claim proceeds only against Cohen, Halajen, Mountainview, and Newport. The state law claims which proceed against these def