Ameriprise Earmarks $40 Million For Medical Capital/Provident Royalty Claims
Ameriprise Financial , Incorporated has announced that it is setting aside $40 million in reserves to pay claims arising from the sale of bogus Regulation D private placements by its broker-dealer subsidiary Securities America, Incorporated, as reported by Investment news. This $40 million relates to the sale of Medical capital Holdings, Inc. and Provident Royalties, LLC and represents only about 10% of the total losses sustained by customers. In truth, there is nearly $400 million worth of Medical Capital and Provident investments that are outstanding and in default.
A federal judge in the Northern District of Texas halted all arbitration claims pending until a preliminary class action settlement agreement is heard on March 18, 2011. Securities America agreed to contribute around $21 million as a settlement for investors. Unfortunately, any class action settlement where investors would receive a fraction of their losses would prohibit investors from pursuing arbitration claims through the Financial Industry Regulatory Authority (FINRA).
In 2009, the Securities and Exchange Commission (SEC) charged Medical Capital and Provident Royalties with fraud, resulting in the closing of some 24 independent broker-dealers who sold the high risk products to investors as being risk free.
If you have suffered private placement losses, please contact our securities law firm at 1-800-259-9010 for a free consultation.