CORRECTING AND REPLACING -- Notice to All Medical Capital Corporation Investors from the Law Firm of Tramont Guerra & Nunez, PA
The Law Firm of Tramont Guerra & Nunez announces the removal of GunnAllen Financial, Inc. and J. P. Turner & Co. from the list of firms who marketed or sold investments in Medical Capital.
(Vocus/PRWEB ) November 3, 2009 -- In a release issued on August 14, 2009 by Tramont, Guerra, & Nunez under the same headline, note the removal of J.P. Turner & Co. (“J.P. Turner”) and GunnAllen Financial, Inc. (“GunnAllen”) from the list of brokers selling Medical Capital securities in the first paragraph. Tramont Guerra & Nunez apologizes to J.P. Turner and GunnAllen for mistakenly including the firms in the earlier release. Tramont Guerra & Nunez now understands that J.P. Turner and GunnAllen neither marketed nor sold investments in Medical Capital and should not have been named. The corrected release follows:
Coral Gables, August 14, 2009, – The Law Firm of Tramont Guerra & Núñez, PA (TGN) makes an announcement to all investors in securities issued by Medical Capital Corporation (MCC), Medical Capital Holdings, Inc (MCHI) and Medical Provider Funding Corporation VI (MP VI) concerning the lawsuit (Case No. SACV09-818DOC (RNBX)) filed on July 16, 2009, in the United States District Court Central District of California Southern Division. According to documentation, securities issued were distributed to investors through a network of brokerage firms which included American Portfolios Financial Services Inc., Capwest Securities Inc., National Securities Corp., Next Financial Group Inc. and Securities America Inc.
The lawsuit filed by the Securities and Exchange Commission (SEC) alleges that the defendant MCHI, acting through wholly owned subsidiaries, committed fraud in the offer and sale of notes in Special Purpose Corporations (SPCs) including MP VI, by misappropriation of funds and misrepresentation. As of June 19, 2009, the SEC alleges defendants have utilized $18.5 million of the $76.9 million raised in the sale of MP VI notes to pay administrative fees to MCC. Both the original and supplemental Private Placement Memorandum issued by MP VI stated that MP VI would not use “any proceeds from the sales of notes to pay administrative fees to [MCC for the services it provides as administrator.” In addition, the SEC alleges that the defendants have defrauded investors by misrepresenting to investors that no prior offerings had defaulted on or been late in making payments to investors of principal and/or interest. On August 3, 2009 the SEC obtained an emergency court order halting the $76.9 million offering based on the allegations of fraud perpetrated by the defendants.
In addition to denying MCHI further access to investors, U.S. District Judge David O. Carter froze the assets of Medical Capital Holdings and its subsidiaries and appointed a temporary receiver, among other actions. Investors who invested in the SPCs through one of the aforementioned brokerage firms may have a claim against their broker for selling the alleged fraudulent securities. Firms selling the MP VI securities are under an obligation of due diligence to assure the investor that the representations made are accurate.
Investors should consider whether an individual securities arbitration claim filed with the Financial Industry Regulatory Authority, (FINRA) is an effective method to recover their investment losses. The brokerage firms who distributed the securities issued by Medical Capital Corporation and its affiliated entities were obligated to conduct due diligence of facts concerning the risks associated with the investments. Many investors were advised by their financial advisors that these securities were suitable for current income investment objectives. Brokerage firms are obligated to give, and investors are entitled to rely upon, brokerage firms for competent, suitable investment advice in accordance with FINRA Rules and Regulations. Recommendations of unsuitable investments and/or failure to conduct adequate due diligence are both causes of action that form the basis for individual securities arbitration claims filed with FINRA.
The Firm of Tramont Guerra & Núñez, PA, is a nationally recognized, Martindale Hubbell “AV” rated law firm. To request a confidential consultation from a TGN attorney to assist you in determining whether you have a viable individual claim for investment losses that exceed $100,000 from a full service brokerage account, contact us on our website. To speak directly with an attorney, call (800) 578-0137 and ask for Benjamin Fernandez, Esquire.
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