MIAMI, Jan. 3, 2011 (GLOBE NEWSWIRE) -- The securities law firm of Dimond Kaplan & Rothstein, P.A. (http://www.dkrpa.com or http://www.investmentfraud-lawyer.com) alerts Medical Capital investors that a FINRA arbitration panel recently issued a large award against Securities America, Inc. stemming from Securities America's sales of fraudulent Medical Capital securities. The arbitrators awarded nearly $750,000 in compensatory damages to a Medical Capital investor, along with $250,000 in punitive damages, more than $110,000 in attorneys' fees, and nearly $60,000 in costs. The arbitrators also ordered that the investor will be permitted to keep as additional punitive damages any additional recoveries from other sources, such as the Medical Capital receivership or lawsuits brought against Medical Capital's trustees.
"We believe that this arbitration award reflects that the arbitrators recognized that Securities America ignored glaring red flags about Medical Capital," said securities attorney Jeffrey Kaplan.
This is believed to be the first Medical Capital case to proceed to a final hearing against Securities America. Dozens of additional cases remain pending against, in which investors seek to recover millions of dollars in Medical Capital losses from Securities America.
Securities America sold hundreds of millions of dollars of Medical Capital notes that allegedly represented interests in medical receivables. But Medical Capital is alleged to have been a massive $2.2 billion fraud. Many of the medical receivables that supposedly were underlying the notes did not exist. As such, investors bought non-existent receivables. Medical Capital appears to have used newer investors' money to pay promised investment returns to earlier investors, in Ponzi-scheme fashion. Medical Capital also made undisclosed expenditures unrelated to medical receivables, including $20 million on a Hollywood movie and a 118-foot yacht.
Securities America appears to have ignored its own President's pleas not to sell Medical Capital securities due to the lack of audited financial statements. But Securities America ignored its own President, failed to demand or even request that Medical Capital have its financials audited, and sold hundreds of millions of dollars of Medical Capital notes without the benefit of audited financials. Further, Securities America ignored the suggestions of a third-party due-diligence company that certain warnings be provided to Securities America's customers. Securities America even refused to provide the warnings to its own brokers for fear that the brokers would alert Securities America investors of the concerns. Securities America appears to have acted in this manner because it was more concerned with the $30 million in commissions it collected from Medical Capital investment sales than it was with its legal duties owed to its customers.
Dimond Kaplan & Rothstein, P.A. is an AV-Rated law firm that represents investors nationwide in stockbroker fraud and investment loss cases. The firm currently represents dozens of Medical Capital investors. If you suffered Medical Capital investment losses, please contact Jeffrey Kaplan, Esq. of Dimond Kaplan & Rothstein, P.A. at (888) 578-6255 or jkaplan@dkrpa.com for a free case evaluation. You also may visit the firm on the web at www.dkrpa.com or www.investmentfraud-lawyer.com.
The Dimond Kaplan & Rothstein, P.A. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4684