Ameriprise and its Securities America Affiliate Seek to Use a Legal Loophole to Avoid Hundreds of Millions of Dollars in Legal Exposure


Securities America, Inc., the Ameriprise Financial affiliate that sold hundreds of millions of dollars of fraudulent private placements issued by Medical Capital Corp. and Provident Royalties LLC, is trying to force a class action settlement in connection with investors who purchased Medical Capital Notes though Securities America. The proposed settlement would protect millions of dollars of its assets from defrauded investors and allow it to stay in business, according to InvestmentNews articles by Bruce Kelly entitled “Lawsuits suck air out of Securities America’s cash cushion,” and “Ameriprise reaches $27M settlement over private placements: Attorney.”

According to the articles, Securities America clients lost over $400 million dollars in Medical Capital and Provident Royalties securities.

A proposed $21 million settlement for investors who purchased Medical Capital Notes from Securities America, if approved by the court, would pay Medical Capital investors about 5 cents on the dollar and would prevent them from opting-out of the class action to pursue individual arbitrations against Securities America.

Separately, it is reported that Ameriprise recently reached a $27 million settlement with Securities America clients. This settlement appears to be in connection with the investors who purchased Provident Royalties investments through Securities America.

Ameriprise had previously set aside $40 million for the Securities America claims, according to the article.

Securities America has about 1,800 registered representatives and advisers who produced $500 million in commissions and fees in 2010, according to the article. Ameriprise, which is a so-called “control person” of Securities America, has more than 11,400 financial advisors and registered representatives, and reported net revenues of $9.976 billion and net profits of $1.097 billion in the year ended December 31, 2010.

Page Perry, is an Atlanta-based law firm with over 125 years of collective experience representing investors in securities-related litigation and arbitration. While past results are not indicative of future success, Page Perry’s attorneys have assisted dozens of investors in recovering over $130 million from brokerage firms since 2005. Page Perry’s attorneys are actively involved in counseling institutional and individual investors regarding their investment problems. For further information, please contact us.