Leighton

May investors who purchased limited partnership interests in certain “tax shelters” recover as damages, in a federal securities fraud suit, back taxes and interest paid to the Internal Revenue Service?

I

This complex and seemingly interminable securities fraud action was initially filed in 1985 1 The plaintiffs consist primarily of two groups of California limited partnerships. The partnerships in the first group (the “1982 R & D Partnerships”) 2 were allegedly established in 1982 by the defendants to research and to develop state-of-the-art technical trading systems for use in the commodity futures trading market. The second set of partnerships (the “1983 CTA Partnerships”) 3 were also allegedly established by the defendants and were designed to serve as commodity trading advisors for licensees of the programs to be developed by the 1982 R & D Partnerships.

The plaintiffs’ complaint alleged that the defendants sold certain investment contracts to the partnerships in derogation of the registration and anti-fraud provisions of the Securities Act of 1933, 15 U.S.C. § 77a et seq., section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), 15 U.S.C. § 78j(b), and…