The Receiver for Medical Capital Holdings Inc. issued his Third Report on October 9, 2009. The most recent report did contain some additional information but was, in most part, a recap of what was included in the Second Report. The reports can be found at http://www.medicalcapitalreceivership.com. Nothing in the Third Report indicates any greater likelihood of recovery for investors directly from Medical Capital. As indicated in the reports, out of the 104 medical accounts receivable clients listed, 53 of the accounts, totaling some $542,894,528, appear to no longer exist.
According to Pratt H. Davis, an attorney at Page Perry, broker/dealers like Securities America who sold the Medial Capital offerings, “could face liability on several fronts for selling the fraudulent securities” and that “it is clear that the firms selling these securities had a duty of due diligence to determine that the offerings, were in fact, what they were represented to be and to not misrepresent the safety of the investments if they knew or should have known of the problems with the securities.”
It also appears from the information available that the Trustees of the funds may also face significant liability based upon their involvement in the transactions. As of this date, at least one class action has been filed against the Trustees. According to Mr. Davis, “whether or not individuals want to be a part of the class or proceed with their individual claims and counsel is a decision that each individual needs to determine based upon their own respective circumstances.” Mr. Davis further stated, “each client needs to evaluate the best way to proceed; some clients with small losses may be better off proceeding in a class while those with larger losses typically want to retain their own counsel and proceed with their individual claims.”
Based upon the Receiver’s reports, Mr. Davis believes that those waiting for a return of their money from any SEC collections from Medical Capital may have a long wait for only pennies on the dollar. Due to the collectability issues related to Medical Capital, as evidenced by the Receiver’s reports, Mr. Davis said that “those who have invested in these funds need to be proactive about seeking advice about recovering their damages from parties, other than Medical Capital, that may be liable for damages in these transactions.”
Page Perry is an Atlanta-based law firm with over 125 years collective experience representing investors in securities-related litigation and arbitration. While past results are not indicative of future success, Page Perry’s attorneys have recovered over $1,000,000 for clients on more than 30 occasions. Page Perry’s attorneys are actively involved in representing institutional and corporate investors in auction-rate securities cases. For further information, please contact us.