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Medical Capital Losses

Medical Capital losses may be changing the face of future private placement deals. In July, the Securities and Exchange Commission (SEC) levied fraud charges against Medical Capital Holdings, bringing into question the suitability of the products and the sales tactics used by broker/dealers that sold the private placements to individual investors.

Among the charges outlined in the SEC’s complaint: Medical Capital and top executives Sidney M. Field and Joseph J. “Joey” Lampariello allegedly defrauded investors, wrongfully diverted $18.5 million of their money and failed to disclose information about several defaults. A receiver has since taken over Medical Capital’s business.

According to the SEC, Medical Capital raised some $2.2 billion from approximately 20,000 investors over the past six years. The company, which is based in Tustin, California, places investors’ money primarily into unpaid bills, or receivables, from hospitals and doctors.

In November, a class action lawsuit was filed against a number of brokerage firms that sold the private placements in question. Those firms include: National Securities Corp., Cullum & Burks Securities, Securities America, Ameriprise Financial, Inc., and CapWest Securities.

The broker/dealers responsible for selling private placements in Medical Capital had an obligation to their clients to perform due diligence on the investments they sold. This didn’t happen. And now investors are paying the price.

Maddox Hargett & Caruso P.C. continues to investigate the sales practices of broker/dealers that sold Medical Capital notes to investors. If you sustained investment losses in Medical Capital Holdings, contact our securities fraud team. We can evaluate your situation to determine if you have a claim.

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