Oil Company (NSO), Mount Vernon Savings and Loan Association, and seven individual defendants employed by NSO. The individual defendants are Jack Needham, Theron Skyles, Marion Smith, Arthur Shapro, Katherine Walsh, Laura Woodward, and Clifford Kupperberh (hereafter referred to as "Movants"). The complaint sets forth ten separate claims alleging violations of the federal securities laws, state statutes and common law. The case is now before the Court on Movants' motion to dismiss the complaint and portions thereof pursuant to Rules 12(b)(1), 12(b)(2), 12(b)(3), 9(b) and 12(b)(6) of the Federal Rules of Civil Procedure and a motion to transfer venue to the Northern District of California pursuant to 28 U.S.C. § 1404(a).
NSO is a California corporation, whose principal place of business is in Oakland, California. The company is engaged in the business of investing in oil-producing properties and operating licensing schools. Plaintiff served as Vice President of NSO from April 1980 to October 1981, and was responsible for sales of securities. While employed by NSO, she purchased shares of stock in the company, the purchase and sale of which is the subject of this law suit. Plaintiff purchased these shares for $100,000 plus the transfer of title to a parcel of real estate located in the District of Columbia. All of the negotiations with respect to the transfer of title took place in California. After NSO acquitted title to the property, it negotiated a loan with Mount Vernon Savings and Loan in the amount of $300,000. The loan was secured by a Deed of Trust in the property. On October 19, 1982, NSO filed a Notice of Bankruptcy and thus all proceedings against it have been stayed under the provisions of the Bankruptcy Act. 11 U.S.C. § 362.
Plaintiff alleges in her complaint that defendants entered into a conspiracy, scheme and common plan to mislead, deceive and defraud her by inducing her to invest money in a fraudulent transaction. The common scheme which plaintiff alleges consisted of: 1) inducing plaintiff to purchase unregistered securities through a transaction which, unknown to plaintiff, violated federal and California securities laws, 2) concealing from plaintiff the fact that NSO was engaged in more than two acts prohibited under the Racketeer Influenced and Corrupt Organization Act (RICO), 18 U.S.C. § 1964, 3) defendants making false representations to plaintiff that her investment in NSO was secure and that she could be made whole at any time, 4) the conversion by defendants of the funds which she had invested to their personal use, and 5) embezzlement by defendants of plaintiff's funds through self-dealing.
The seven individual defendants have moved for dismissal under Rule 12(b)(2) Fed. R. Civ. P., for lack of personal jurisdiction. Jurisdiction of this Court is based on Section 22 of the Securities Act of 1933 (Securities Act), 15 U.S.C. § 77v., Section 27 of the Securities and Exchange Act of 1934 (Exchange Act), 15 U.S.C. § 78aa, RICO, 18 U.S.C. § 1965, and the principle of pendent jurisdiction. Movants contend that they did not perform any act within this jurisdiction to warrant an exercise of personal jurisdiction over them. However, where defendants reside within the territorial boundaries of the United States, the "minimal contacts" theory is not relevant. A federal statute providing for nationwide service of process justifies the exercise of power over these defendants. See Hilgeman v. National Insurance Co. of America, 547 F.2d 298 (5th Cir. 1977); Mariash v. Morrill, 496 F.2d 1138 (2d Cir.1974); Gilbert v. Bagley, 492 F. Supp. 714 (M.D.N.C. 1980); SEC v. Geo Dynamics Oil and Gas, Inc., et al., 1978Fed. Sec. L. Rep. (CCH) P 96,428 (D.D.C. 1978). The Court finds, therefore, that it has in personam jurisdiction over Movants and their motion to dismiss made pursuant to Rule 12(b)(2) is denied.
The Court will now address the question of venue. Plaintiff bears the burden of showing that the defendants fall within the special venue provisions of the Securities Act, the Exchange Act, and RICO. These statutes establish proper venue:
"in the district wherein the defendant is found or is an inhabitant or transacts business or in the district where the offer or sale took place . . ." 15 U.S.C. § 77v. (Securities Act)