Investment Fraud Lawyer Blog

As reported in recent articles in Investment News, after the SEC filed fraud charges against Medical Capital Holdings Inc, the Financial Regulatory Authority indicated that it has “a number of investigations under way involving the allegations of wrongdoing arising from the sale of these ‘Reg D’ private placements.” Regulation D refers to the securities regulation that governs the sale of private-placement investments that don’t have to be registered with regulators.

Continue reading "Medical Capital Debacle Puts Private (Reg D) Offerings under the Microscope" »

Recently released figures show that colleges across the nation suffered a 19 percent decline in their endowments in 2009. Some school endowments have reported even steeper declines, including Georgia Tech (26%), the University of Georgia Foundation (23%), and Emory University (21%). While the financial markets as a whole experienced a significant downturn in 2008, the stock market began rebounding in early 2009 and many investment portfolios have since regained much of their value—but not all. According to an article in the Atlanta Journal Constitution, Emory has had to cut its expenses by $50 million a year and eliminated 500 administrative positions, despite having one of the richest endowments in the country. Smaller schools with more modest endowments are in a more precarious position, because a single bad investment may threaten the very survival of the institution.

Continue reading "Have College Endowment Funds Been Victimized by Unscrupulous Brokers?" »

The Massachusetts Securities Division recently filed a complaint against Securities America related to its private offerings of Medical Capital Notes. The collapse of the Medical Capital investments has left investors nationwide in the hole to the tune of about $1 billion.

Continue reading "Evidence Against Securities America Mounts in Medical Capital Cases" »

Investors’ problems with private investments and Reg D offerings appear to be growing at an alarming pace. According to a recent InvestmentNews article by Sara Hansard (“Finra to get tough on Red D offerings,” Dec. 13, 2009), FINRA says it is “getting tough” and plans to file regulatory actions against brokerage firms involved in selling private-placement offerings next year. “We have a number of investigations under way involving allegations of wrongdoing arising from the sales of these Regulation D private placements,” James Shorris, executive vice president and executive director of enforcement at FINRA, was quoted as saying in the article.

Continue reading "Wrongdoing in Reg D Offerings and Other Private Investments Becomes a Growing Concern" »

Private investments (Reg D offerings) are exposing investors to significant risks and regulators are fighting to get the situation under control. In a recent article in Investment News, Saras Hansard reported that state securities regulators are making progress toward their goal of regaining authority to regulate these private offerings. Congress preempted that authority by enacting the National Securities Market Improvement Act of 1996. However, state securities regulators have complained that the NSMIA increases the potential for fraudulent private placement offerings. Observers have criticized that decision, believing that state securities regulators are in the best position to deal with private placement offerings.

Continue reading "The Dangers of Private Investments (Reg D Offerings) Grow " »

There have been various developments over the past several weeks which investors may consider relevant in allocating their resources or evaluating alternatives that are available to them. Some of the more significant developments include, but are not limited to, the following:

• The Dow Jones Industrial Average opened the week at 10,310 and, on Monday, the market jumped 35 points.

• On Tuesday, the Dow Jones Industrial Average surged 127 points.

• On Wednesday, the Dow Jones Industrial Average dropped 19 points.

• On Thursday, the Dow Jones Industrial Average tumbled 87 points.

• On Friday, the Dow Jones Industrial Average rose 23 points and closed the week at 10,389.

Continue reading "Page Perry's Market Monitor - December 3, 2009" »

Private investments (also known as private placements or Reg D offerings) have been the subject of a growing number of fraud charges by the U.S. Securities and Exchange Commission and some states. Such deals, including oil and gas ventures and real estate partnerships, have historically been capitalized by sales to individual investors through independent broker-dealers. Promoters of these investments depend upon this channel to raise money and the broker dealers reap rich commissions on the private placements with loads up to 30%.

Continue reading "Reg D Offerings and Other Private Investments Expose Investors to Huge Risks" »

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.

Continue reading "Medical Capital Holdings Alert - Investors Face Tremendous Losses" »

Illiquid, unregulated private placement investment offerings are worrying state regulators, who are charged with protecting the investing public from investment scams, according to a recent article in InvestmentNews by Bruce Kelly. They are known as “Reg D” offerings. There were 26,485 of Reg D offerings in 2008 ($609 billion) compared with 11,000 in 1996, according to the article.

Continue reading "Private Investments (a/k/a Reg D Investments) Pose Significant Risks to Investors" »

The Receiver for Medical Capital Holdings Inc. issued his Second Report on September 7, 2009. According to the Report the estimate for the amount of money raised through the six offerings is $1.778 billion with $268 million in administrative fees taken and a staggering $1.079 billion still due investors. On July 16, the SEC charged Medical Capital Holdings Inc. with fraud related to the sale of $77 million of private securities in the form of notes.

Continue reading "Medical Capital Holdings Update: Receiver Estimates Over $1 Billion Due Investors" »

According to a recent article in InvestmentNews, a former executive of Securities America feared a “panicked run on the bank” for clients who held securities issued by Medical Capital Holdings Inc. On July 16, the SEC charged Medical Capital Holdings Inc. with fraud related to the sale of $77 million of private securities.

Continue reading "How Much did Securities America Really Know about Problems at Medical Capital Holdings?" »