Plaintiffs' Personal Injury Law Firm

Napoli Bern Ripka LLP Investigates Investors' Medical Capital Note Losses

The Securities Fraud Department of Napoli Bern Ripka LLP continues to investgate inappropriate sales practices employed by brokers and investment advisor in the sale of Medical Capital notes.

Medical Capital is a firm based in California that packaged medical receivables, or unpaid bills, into notes and sold them as private placements. On July 16, 2009, the Securities and Exchange Commission filed fraud charges against Medical Capital Corporation, Medical Capital Holdings, Inc., and Medical Provider Funding Corporation VI (collectively, "Medical Capital") in connection with the sale of $77 million of private securities. Later the same day, the Financial Industry Regulator Authority (FINRA) issued a sweep to an undisclosed number of broker-dealers to investigate the sales practices pertaining to the sale of the Medical Capital notes. 

FINRA has issued clear warnings to the financial services community regarding their obligation to diligently research and understand a proposed investment, including its prior performance, underlying assets, volatility and risks exposure. The SEC has also been clear on the disclosure requirements imposed on issuers to ensure that the investment public is protected.

Recent arbitration claims being filed accuse brokers and brokerage firms of failing to disclose material risks or failing to meet their sales practice obligations by not investigating the Medical Capital notes prior to recommending them to investors. Broker sales commissions of up 10% are alleged to have been an incentive to ignore the known risks in the sale of the notes.

Most recently, Securities America is accused of actively marketing the Medical Capital Notes through retail marketing tactics including seminars. In a recent development, the Massachusetts Securities Division has filed a complaint against Securities America for material omissions and misleading statements made in the sale of these notes to investors. It is alleged that Securities America ignored internal due diligence regarding the investment and red flags regarding risk.

Napoli Bern Ripka LLP has one of the most notable securities arbitration departments in the country. We represents individual and instutional clients across the courntry. Investors can obtain a free legal consultation by contacting Adam J. Gana at (212) 267-3700. We represent purchasers of the Medical Capital Notes regardless of the amount lost.