The White Law Group is investigating securities fraud claims on behalf of investors involving recommendations made by broker-dealers like Securities America, Peak Securities, and Cedar Brook Financial Partners (among others) to invest in Medical Capital.
Medical Capital was set up to purchase accounts receivables of medical providers and package them as private investments. The firm raised $2.2 billion from 20,000 investors over a six-year period, but has been charged with defrauding investors.
In 2009, Tustin, Calif.-based Medical Capital was charged by the Securities and Exchange Commission with fraud in the sale of $77 million of privately placed notes.
The SEC alleged that $18.5 million of the proceeds were illegally used by Medical Capital to cover administrative costs.
In March 2010, federal prosecutors launched a criminal investigation into two executives with ties to Medical Capital Holdings: Medical Capital CEO Sidney M. Field and President Joseph J. “Joey” Lampariello. Both Field and Lampariello were sued by the SEC in August 2009 for securities fraud.
A number of broker/dealers that sold Medical Capital investments also are facing regulatory scrutiny and lawsuits. At the top of the list is Securities America, which was sued in January 2010 by the Commonwealth of Massachusetts. According to the complaint, a number of Securities America reps allegedly misled investors about investments in Medical Capital and failed to disclose the risks associated with the investments.
The Massachusetts lawsuit further alleges that between 2003 and 2008, a group of Securities America executives repeatedly failed to heed the warning of an outside due-diligence analyst regarding the risks of the Medical Capital investments.
Securities America has also been sued by the Montana State Securities Commission.
According to the Montana lawsuit, Securities America and several of its top executives, including new chief executive James Nagengast, allegedly “withheld material information regarding heightened risks” from its representatives and their clients regarding notes issued by Medical Capital Holdings.
Securities America brokers sold $698 million worth of the notes from 2003 to 2008 and “concealed these risks” from its brokers and their clients, the Montana lawsuit contends.
One Securities America financial advisor facing legal troubles is William Glubiak, who’s been named in a $7.7 million complaint from about 24 households of investors who purchased investments in Medical Capital Holdings.
Another leading Securities America adviser involved in litigation connected to Medical Capital is Paula Dorion-Gray. In November 2009, Dorion-Gray was cited in a $254,000 complaint.
If you have any information that may assist us in our investigation of Securities America and Medical Capital, please contact us at 312-238-9650.
In addition, to the extent that any Medical Capital sales occurred through misrepresentations or omissions, or because of a failure of the salesperson to conduct “due diligence,” investors may have claims against the salesperson and the brokerage firm involved.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida. With over 30 years of securities law experience, including experience working at FINRA (f/k/a the NASD) and the SEC, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions.
For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.