Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Thursday, May 26, 2011

Banks Sue Brokers Over Med Cap Fraud

Bank of New York Mellon Corp. and Wells Fargo Bank, who were trustees for Medical Capital Holdings, have sued a number of broker-dealers that marketed the Med Cap private placement offerings, claiming that the broker-dealers sold the securities to investors for whom it was an unsuitable investment and made misrepresentations about the investment's risks.  The banks are defendants in a 2009 class action that followed SEC charges that Med Cap was a fraud.  InvNews, Wells Fargo, BoNY Mellon sue Securities America, other B-Ds over MedCap

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