MIAMI, Jan. 26, 2010 (GLOBE NEWSWIRE) -- The securities law firm of Dimond Kaplan & Rothstein, P.A. (http://www.dkrpa.com or http://www.investmentfraud-lawyer.com) informs Medical Capital investors that Massachusetts securities regulators have sued Securities America, Inc., accusing the brokerage firm of committing securities fraud on a massive scale. Specifically, Securities America sold approximately $697 million in promissory notes that were issued by entities wholly owned by Medical Capital Holdings, Inc. ("Medical Capital"). Unfortunately for Securities America's customers and other investors, the notes were part of an alleged Ponzi scheme, Medical Capital has defaulted on more than $1 billion of the notes that it issued. Securities America sold $358 million of those defaulted notes. The United States Securities and Exchange Commission ("SEC") sued Medical Capital several months ago, alleging that Medical Capital was a massive investment fraud, and Medical Capital now lies in an SEC receivership and is the subject of various injunctions and asset-freeze orders.
Similar to at least two nation-wide class-action lawsuits and dozens of FINRA securities arbitration claims that have been filed against Securities America, the Massachusetts lawsuit alleges that Securities America failed to conduct proper due diligence of Medical Capital or ignored red flags or which it was aware and then committed numerous material omissions and made misleading statements when it sold Medical Capital notes to investors. In other words, Securities America is accused of failing to disclose numerous red flags, warning signs, and material risks to investors. Securities America also is accused of ignoring repeated pleas by its own President and by a third-party due diligence vendor to make certain risk disclosures to investors.
Medical Capital claimed to provide financing to healthcare providers by purchasing the providers' accounts receivables and making loans to those providers. The accounts receivables then allegedly were packaged into notes and sold through private placements to investors. Approximately 20,000 investors purchased $2.2 billion in Medical Capital investments, including hundreds or thousands of Securities America customers. Securities America had approved the Medical Capital notes for sale by its brokers to Securities America customers.
Miami, Florida-based law firm Dimond Kaplan & Rothstein, P.A. and Coral Spring, Florida-based Blum & Silver, LLP are nationally recognized law firms with extensive experience representing investors throughout the United States and Latin America in investment fraud and stockbroker fraud cases involving stocks, bonds, options, private placements, Regulation D offerings, principal protected notes, structured products, and hedge funds. The law firms currently represent numerous Medical Capital investors who have lost tens of millions of dollars. The firms' clients invested in Medical Capital notes with the expectation that their principal was safe, and they never were informed of the fraudulent nature of the investments. If you suffered Medical Capital investment losses, please contact attorney Jeffrey B. Kaplan of Dimond Kaplan & Rothstein, P.A. at (888) 578-6255 or jkaplan@dkrpa.com or Scott L. Silver of Blum & Silver, LLP at (877)-STOCKLAW for a free case evaluation. You also may visit the firm on the web at www.dkrpa.com, www.investmentfraud-lawyer.com, or www.medicalcapitallosses.com.
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