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Securities America Settlement Update

There is some new information for Securities America clients who suffered losses from private placement investments in Medical Capital Holdings and Provident Royalties. On Aug. 4, U.S. District Court Judge W. Royal Furgeson Jr. signed an order to approve an $80 million settlement between Securities America and class action investors suing the broker/dealer over the failed investments.

Earlier this year, a separate $70 million settlement was reached with investors who had filed individual arbitration claims against some brokers.

As reported Aug. 14 by Investment News, approval of the settlement means Securities America reps and financial advisers who had tainted employment records because of open or pending investor arbitration claims from the MedCap and Provident sales will now see closure.

From 2003 to 2008, Securities America brokers sold about $700 million of Medical Capital private placements. Other broker/dealers sold the investments, as well, but Securities America was by far the biggest distributor of them.

In the summer of 2009, the Securities and Exchange Commission (SEC) charged both Medical Capital and Provident Royalties with fraud.

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