Medical Capital Holdings (MedCap) and Securities America

Napoli Bern Ripka, LLP is currently seeking clients who have incurred losses investing in Medical Capital Holdings. In July 2009, the Securities and Exchange Commission (SEC) sued Medical Capital for fraud, claiming that Medical Capital misappropriated $18.5 million of investors’ money and misrepresented its own business records by keeping several defaults under wraps. A court-appointed receiver subsequently revealed that most of the account receivables on MedCap’s books did not exist.

Securities America is one of the broker/dealers facing legal action in connection with Medical Capital Holdings. Massachusetts regulators sued the Omaha-based company on January 26, 2010, claiming it misled investors about the risks involved in the Medical Capital Notes and the financial health of the issuer, Medical Capital Holdings. According to the complaint, 400 Securities America advisers allegedly sold $700 million of the private placements, half of which are now in default. The $700 million sold by Securities America represents 37% percent of the $1.7 billion in notes that MedCap issued. Securities America was accused of committing securities fraud on a “massive scale” by committing “acts of material omissions and misleading statements.” The company continued to sell the notes to investors even after a senior-level company officer expressed concerns about Medical Capital and its fiscal health.

In addition to Securities America, other broker/dealers such as QA3 Financial Corp., National Securities Corp., CapWest Securities, Independent Financial Group LLC, Investors Capital Corp., and Centaurus Financial are also being investigated for investors’ losses in Medical Capital Holdings.

If you lost money related to an investment in Medical Capital Holdings, please do not hesiate to contact us to discuss your potential claim.