MIAMI, Aug. 24, 2009 (GLOBE NEWSWIRE) -- The securities law firm of Dimond Kaplan & Rothstein, P.A. (http://www.dkrpa.com or http://www.investmentfraud-lawyer.com) has been retained by numerous investors to recover Medical Capital investment losses. The firm expects to file dozens of FINRA securities arbitration claims in the coming weeks against the brokerage firms that sold the investments. These will seek to recover investors' investment losses. Many of the claims will include claims to recover losses in two other allegedly fraudulent investment products, DBSI and Provident/Shale Royalties.
Medical Capital packaged medical receivables and sold them as private placements. The SEC has accused Medical Capital Corporation, Medical Capital Holdings, Inc., and Medical Provider Funding Corporation VI (collectively, "Medical Capital") of securities fraud, namely misappropriating $18.5 million of the $76.9 million raised through securities offerings to pay administrative fees. The SEC's complaint alleges that the offering documents stated that administrative fees would not be paid out of offering proceeds. The complaint also alleges that the defendants defrauded investors by misrepresenting that no prior notes had defaulted on or been late in making principal or interest payments. In fact, four prior investments had defaulted.
According to a report issued by the court-appointed receiver, the fraud could be even greater. The report claims that Medical Capital spent lavishly on assets that had nothing to do with medical receivables, including $20 million on a Hollywood movie, $7 million on a mobile-phone application for a video feed of a hamster in a cage, and a 118-foot yacht. The receiver's report also claims that some of the receivables that Medical Capital packaged into the notes were overvalued and some did not exist at all.
A securities industry publication has reported that a number of brokerage firms sold Medical Capital investments, including Securities America, American Portfolios Financial Services, CapWest Securities, Gunn Allen, J.P. Turner, National Securities Corp., and NEXT Financial Group.
Investors who bought Medical Capital notes from a brokerage firm may be able to recover their investment losses through FINRA arbitration claims against the brokerage firm. "In our opinion, the Medical Capital investments were highly illiquid and very risky, at best. We further believe that the brokerage firms that sold investments failed to perform the proper due diligence that would have revealed the fraudulent nature of the investments," said Dimond Kaplan & Rothstein attorney Jeffrey Kaplan.
Dimond Kaplan & Rothstein, P.A. is an AV-Rated law firm that represents investors nationwide in stockbroker fraud and investment loss cases. The firm represents a number of Medical Capital investors, and has represented investors against most major Wall Street brokerage firms in claims involving limited partnerships, stocks, bonds, options, and hedge funds. If you suffered investment losses in Medical Capital investments,, please contact Jeffrey Kaplan, Esq. of Dimond Kaplan & Rothstein, P.A. at (888) 578-6255 or jkaplan@dkrpa.com for a free case evaluation. You also may visit the firm on the web at www.dkrpa.com or www.investmentfraud-lawyer.com.