Corporate & Securities Law

Securities America Advisers Under Fire Over Medical Capital Investments

By Mark Maddox

Securities America has a growing public relations problem. Last month, the broker/dealer was charged by Massachusetts regulators for allegedly failing to reveal key information to investors about high-risk notes issued by Medical Capital Holdings. Now, some of Securities America?s top producers are being sued by investors who say they were ill-informed about the risks of the Medical Capital deals that some Securities America advisers touted.

As reported Feb. 7 by Investment News, William Glubiak was named in December in a $7.7 million complaint from about 24 households of investors who purchased investments in Medical Capital Holdings.

Another leading Securities America adviser facing litigation connected to Medical Capital sales is Paula Dorion-Gray. In November, Dorion-Gray was named in a $254,000 complaint that alleges she recommended alternative investments in Medical Capital and another private placement, Provident Royalties LLC.

As for Securities America, it maintains its innocence.

?The Medical Capital situation is highly unfortunate for investors, advisers and broker-dealers alike, all of whom were intentionally defrauded by the principals at Medical Capital,? Securities America spokeswoman Janine Wertheim said in the Investment News article.

?Securities America performed extensive, industry-standard due diligence of Medical Capital, and every person that purchased Medical Capital through SA was an accredited investor, according to their financial suitability documents, and attested to that as well as to their understanding of the risks . . . We plan to vigorously defend our firm and our advisers that sold Medical Capital,? she said.

Full post as published by Representing Investors on February 09, 2010 (boomark / email).