Even though Securities America continues to wage legal battles stemming from sales of Medical Capital private placements, the company apparently is beefing up its network of independent representatives and advisers.
As reported Nov. 1 by Investment News, Securities America acquired a branch of about 45 representatives and managers in control of $500 million in client assets formerly affiliated with Equitas America LLC in September. One month earlier, Steve Bull, a former branch manager with 20 reps under him at Next Financial Group, joined Securities America.
Additional acquisitions and/or mergers could occur in the future, according to Securities America CEO Jim Nagengast, especially in light of the fact that more broker/dealers are closing up shop – either for capital funding issues or legal battles over private placement deals.
For more than a month, Securities America has been involved in an administrative hearing with the Massachusetts Securities Division over allegations that the firm misled Massachusetts investors who bought $7.2 million in Medical Capital Holdings notes from Securities America reps.
The administrative hearing comes on the heels of a Jan. 26 lawsuit in which Massachusetts Secretary of State William Galvin accuses Securities America of committing securities fraud on a “massive scale.” Among the charges, Massachusetts regulators allege that Securities America intentionally failed to reveal potential red flags to advisers and clients about Medical Capital.
In July 2009, the Securities and Exchange Commission (SEC) filed fraud charges against Medical Capital, which currently is in receivership.
Since then, investors have filed lawsuits and arbitration complaints over the high-risk private placements against more than 50 securities firms.
If you suffered investment losses in Medical Capital notes sold by Securities America, please contact us. A member of our securities fraud team will help you determine if there is a viable claim for recovery.