WFP Securities Closes Shop Over MedCap Private Placements
The list of independent broker/dealers closing up shop over failed private placements in Medical Capital Holdings and Provident Royalties keeps growing. The latest B-D to join the shuttered ranks is WFP Securities.
San Diego-based WFP Securities, which is facing more than $14 million in legal claims tied to private placement, notified the Financial Industry Regulatory Authority (FINRA) last week of its plans to close.
According to court documents, WFP Securities sold some $27 million of private placements issued by Medical Capital Holdings and $6.8 million issued by Provident Royalties LLC. In the summer of 2009, the Securities and Exchange Commission (SEC) charged both companies with fraud.
Dozens of broker/dealers that sold private placement notes issued by Provident and Medical Capital have closed their doors in the past year. Meanwhile, investors continue to file arbitration claims and lawsuits against broker/dealers for their alleged failure to conduct adequate due diligence on the products they sold.
WFP Securities also is one of 13 broker/dealers named in a recent lawsuit filed by BNY Mellon over sales of Medical Capital notes.