Massachusetts And Securities America Settle Medcap Flap
Securities America has reached a deal with Massachusetts to make sure investors get 100% of their principal back for investing in Medical Capital Holdings private placement offerings that went bust, according to an article in Investment News. Securities America, which is presently up for sale by Ameriprise Financial Incorporated, is to make whole 63 Massachusetts investors who purchased $5 million of the failed notes by paying $2.8 million within 10 days. Medical Capital was charged with fraud by the SEC back in 2009 and is now in receivership. Out of the dozens of independent broker dealers that sold the MedCap notes, Securities America was by far the largest distributor, raising some $700 million between the years 2003 and 2008.
There are a couple of issues that could change the ultimate payout by Securities America. If the class action settlement that is pending before a federal judge in Dallas falls apart, Securities America could have to throw in another $2.2 million and if the receiver for Medical Capital fails to pay 10% back to investors, then Securities America would have to pay more.
If you have suffered losses as a result of private placement offerings, please contact our securities law firm for a confidential consultation at 1-800-259-9010.