Blum Law Group to represent investors for losses in Medical Capital

On July 16, 2009, the Securities and Exchange Commission filed an emergency court action to halt a $77 million offering fraud perpetrated by defendants Medical Capital Holdings, Inc. (“Medical Capital”), Medical Capital Corporation (“MCC”) and others. The SEC’s complaint alleges that the defendants defrauded investors by misappropriating about $18.5 million of investor funds and by misrepresenting to investors that no prior offerings had defaulted on or been late in making payments to investors of principal and/or interest. Our investigation has learned that Medical Capital allegedly used investor funds for movie projects, personal expenses, expensive yachts and other improper activities.

However, it now appears that the fraud was much larger and that numerous brokerage firms including Securities America sold investments in Medical Capital without allegedly doing the proper due diligence.

As alleged in the SEC’s complaint, the defendants defrauded investors by misappropriating millions raised through the sale of notes. The selling agents received fees and/or commissions for the sale of these investments. Many of these brokerage firms are small or regional brokerage firms which was responsible for performing a reasonable investigation before selling these investments to its investors.

To determine if some, or all, of the investment losses in Medical Capital are recoverable through FINRA securities arbitration claims, please contact Blum Law Group.