Investors who suffered losses because of financial ties to Medical Capital Holdings have taken a lead from a recently filed fraud lawsuit by the Securities and Exchange Commission (SEC) and are moving forth with legal claims of their own. In addition to suing Medical Capital, investors are initiating legal action against the brokerage firms that sold them Medical Capital investments and filing arbitration claims with the Financial Industry Regulatory Authority (FINRA) on charges of alleged breach of fiduciary duties and misrepresentation, as well as other allegations.
The SEC’s lawsuit against Tustin, California-based Medical Capital, which makes its profits by buying and then collecting on unpaid medical bills, alleges that the company stole some $18 million from investors and failed to disclose that several of its funds had entered into default.
At the same time the SEC filed its fraud charges against Medical Capital, FINRA issued a notice to an undisclosed number of broker-dealers for information about their sales practices regarding client investments in Medical Capital.
Currently, Medical Capital Holdings is under a court-appointed receiver, Thomas Seaman, along with its subsidiaries and affiliates: Medical Capital Corp. and Medical Provider Funding VI. The company’s assets, the assets of its affiliates and two executives – CEO Sidney Field and Joseph Lampariello, president and chief operating officer – also have been permanently frozen. Both men are named in the SEC’s July 16 lawsuit.
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