Brokerage Firms Failed to Inform Investors of the Medical Capital Investment Fraud
Because Medical Capital did not have audited financial statements brokerage firms should have done their homework before allowing their brokers to recommend and sell Medical Capital notes to investors. A review of Medical Capital’s financial records would have revealed the overvalued and non-existent medical receivables, the improper use of newer Medical Capital investors’ money to pay returns to earlier Medical Capital investors, the enormous fees that Medical Capital pocketed, and the misuse of investors’ money for a yacht, a Hollywood movie, and other non-medical-receivable expenditures. A proper review would have revealed that Medical Capital was an investment fraud.
Brokerage firms, including Securities America, First Allied Securities, National Securities Corporation, QA3 Financial, Capital Financial Services, and WFP Securities, either failed to conduct proper due diligence or chose to hide glaring red flags from Medical Capital investors. Brokerage firms attended Las Vegas events and Pebble Beach golf outings hosted by Medical Capital, and they chose to sell hundreds of millions of dollars of these fraudulent Medical Capital notes without informing investors of the Medical Capital fraud, likely because they stood to collect millions of dollars in commissions from selling the Medical Capital investments. In other words, brokerage firms placed their own financial interests ahead of the interests of Medical Capital investors, in gross violation of numerous regulatory and legal requirements. From our offices in Miami, West Palm Beach, New York City and Los Angeles, Dimond Kaplan & Rothstein, P.A.’s attorneys are pursuing arbitration claims and lawsuits against these brokerage firms to recover Medical Capital investors’ losses.
