Securities Litigation – Brokerage Firm

A woman who resides in Florida claims that her brokerage firm advised her to personally invest in what turned out to be a $2 billion Ponzi scheme. Ms. Grossbard sued the brokerage company and is seeking class- action status against Securities America Inc. and its parent affiliation, Ameriprise Financial Inc. In 2008, Ms. Grossbard invested $112, 000 in the MedCap organization through Securities America Inc. through which she believed “recklessly” prompted her to invest hey money without “undertaking any reasonable due diligence that would have immediately revealed MedCap’s fraudulent activity”. The federal lawsuit alleges that the company sold over a million dollars of securities to a medical receivables financing company known as Medical Capital Holdings Inc., through various notes. The financing company has been sued by the U.S. Securities and Exchange Commission (SEC) for fraudulent activity. The SEC reinstated that Medical Capital and their affiliations have raised more than $2.2 billion in notes since 2003 and have collected millions of dollars in commissions and fees. The evidence collected that includes the medical receivables company’s accounting reports and practices powerfully pointed to a Ponzi scheme. The conclusion of the case ended with the final verdict that Securities America violated Nebraska securities regulation and ignored to inspect accounting irregularities at MedCap. The Complaint seeks to further represent investors who bought notes from the company through November 21, 2007 to July 31, 2008.

– Source: Herald Tribune

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