Posts Tagged ‘Ameriprise Financial’

MEDICAL CAPITAL INVESTOR AWARDED $400,000 BY FINRA ARBITRATOR

April 29th, 2011
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In 2010 Peak Securities, a brokerage house that promoted and sold Medical Capital securities, was found guilty of fraud, negligence, breach of contract, and breach of fiduciary duty by a Financial Industry Regulatory Authority (FINRA) mediator. In this award against brokers selling fraudulent Medical Capital investments, an investor who experienced financial loss due to Medical Capital securities received a $400,000.00 award.

 

Hundreds of investors who bought fraudulent Medical Capital notes through brokerage firms have filed arbitration claims against those firms.  And in our opinion, this judgment for a Medical Capital investor will be the first of many.

The SEC exposes Medical Capital fraud.

The heart of a 2010 Securities and Exchange Commission (SEC) complaint concerning investment fraud focused on Medical Capital.

Medical Capital professed to supply financial backing to providers of healthcare. According to company execs, they bought the accounts receivables of these providers and made loans to them. The accounts receivables were supposedly sold as notes to investors via private placements, also known as Regulation D offerings.

But it appears to have been a Ponzi scheme.

Medical Capital spent millions of investor dollars on administrative costs. Executives also spent millions on a Hollywood film, a yacht, and other extravagant items. And they failed to make interest and principal payments in a timely manner. They even pretended that no previous notes had been defaulted on.

But that’s not all.

According to the SEC receiver, hundreds of millions in medical receivables that had been packaged as Regulation D offerings were either overvalued or fictional. That’s right! Some had never even existed.

It’s been estimated that 20,000 investors bought $2.2 billion worth of Medical Capital notes, approximately $1 billion of which are in default. And that means massive losses for investors.

Comparable cases are pending.

In early 2010, another brokerage firm dealing in Medical Capital notes was sued, this time by the Massachusetts Securities Division of the Office of the Secretary of the Commonwealth. According to the lawsuit, Securities America, Inc. committed wide scale fraud–hundreds of millions of dollars worth of it—by marketing Medical Capital notes. The state alleges that the firm not only failed to perform with due diligence, but it also failed to disclose obvious risks to its investors, despite the urgings of its own president and a third party.

At Carlson Law, we believe that the arbitration award against Peak Securities foreshadows future arbitration awards against Securities America and the other brokerage firms that sold Medical Capital as well as other fraudulent and/or high-risk private placements such as Provident and DBSI.  For further questions and information, contact our securities fraud attorney in San Diego today.

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Posted in Broker Fraud, Investment Fraud, Securities Arbitration, Securities Fraud, Securities Law, Securities Litigation, Stock Fraud | Comments (15)