March 21, 2011
Judge Refuses to Approve Securities America Settlement
Securities America (as readers of this blog know) faces class actions and arbitrations brought by customers who suffered losses from private placement sold by its brokers. SA and plaintiffs' attorneys in one class action negotiated a $21 million settlement and previously obtained a temporary stay of arbitrations that SA said would otherwise deplete its assets. SA said that unless the settlement was approved, it would be out of business. On March 18, however, a federal district court judge refused to approve the settlement and refused to continue the stay of the arbitrations. See Judge rejects Securities America class settlement.) Observers have wondered whether SA's parent, Ameriprise Financial, would bail it out. Reuters reported earlier today that Ameriprise refused to commit itself, but Investment News reports that it has announced it would be willing to contribute cash to its subsidiary. Details were not provided.
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