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Broker/Dealer Securities America Sold

Plagued by lawsuits and arbitration claims over sales in Medical Capital Holdings and Provident Royalties, broker/dealer Securities America has been sold to Ladenburg Thalmann Financial Services for at least $150 million in cash.

Ameriprise, the parent company of Securities America, revealed in April of its intention to sell the broker/dealer subsidiary.

In July 2009, the Securities and Exchange Commission (SEC) charged Medical Capital Holdings and Provident Royalties with fraud. Securities America was one of the largest sellers of the troubled private placements. Ultimately, clients of Securities America suffered an estimated $400 million in losses from the investments.

In April, Ameriprise offered a settlement of nearly $160 million to Securities America clients.

As reported Aug. 17 by Reuters, Miami-based Ladenburg – which owns other independent brokerages – agreed to make additional cash payments if Securities America meets certain targets in the next two years.

The purchase, which will be financed by another firm affiliated with Ladenburg Chairman Phillip Frost, is expected to be completed by December 2011.

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