Clients of CapWest Securities received a vindication of sorts today when an arbitration panel of the Financial Industry Regulatory Authority (FINRA) ordered the broker/dealer to pay $9.1 million in damages and legal fees stemming from sales of failed private investments in Medical Capital Holdings and Provident Royalties LLC.
The problem is that CapWest closed last year, so the likelihood of investors receiving any substantial financial recovery from the award is slim.
Both Medical Capital and Provident Royalties were charged with fraud by the Securities and Exchange Commission (SEC) in 2009. Investors across the country lost millions of dollars from investments in private placements from the entities.
The $9.1 million award is believed to be one of the single largest arbitration awards based on sales of failed private placements, according to a Jan. 19 article by Investment News.