Judge’s Approval Sought in Securities America Case Involving Medical Capital, Provident Royalties
The parent company of broker/dealer Securities America – Ameriprise Financial – and a group of investors suing the entities over soured private-placement deals in Medical Capital Holdings and Provident Royalties are asking a federal to move forward with a proposed $80 million cash settlement.
“The class action settlement will allow investors to recover a meaningful percentage of their losses,” said the investors’ attorneys in an April 20 story appearing in Investment News.
Securities America sold about $400 million in private placements in Medical Capital Holdings. In July 2009, the Securities and Exchange Commission (SEC) charged the company with fraud, alleging that it was operating a Ponzi scheme. That same month, the SEC charged Provident Royalties with similar fraud actions.
Investors who put their money into Medical Capital lost about $284 million on the deals, according to the complaint before U.S. District Judge W. Royal Furgeson. Provident investors lost $46 million when that company went bankrupt.