Posted in: FINRA | Arbitrations | SEC | Greedy Brokers | Breach of Fiduciary Duty | Risky Investments | Medical Capital Notes |
The Huffington Post profiled two elderly victims from the Medical Capital Holdings scam. In July 2009 the SEC halted the fraudulent $77 million offering of Medical Capital private holdings, because the firm had already defaulted on $992.5 of investors’ Medical Capital Notes since 2003.
Dan Rogas, 84 is a retired professional football player living in Beaumont, Texas with his wife, Betty. The couple had been long-time friends with Thurman Ray “Bo” Crawford, a broker with Securities America Inc, which is owned by the Minneapolis-based Ameriprise Financial Inc.
When the Rogases put their financial future in Crawford’s hands, they had no way of knowing the terrible repercussions.
Securities America was sued by Massachusetts state regulators in January, after the SEC learned the broker-dealer had sold $697 million in Medical Capital Notes, more than any firm. Securities America employees never told customers that Medical Capital had never completed an audit of its finances, or that it was investing million in areas outside of its medical expertise-this included $20 million for a film about a Mexican youth little league team and $7 million invested in a mobile phone application.
Securities America executives and brokers also received incentives from Medical Capital, including paid vacations and high commissions on sales of promissory notes.
In early 2007, Crawford convinced the Rogases to liquidate all their conservative stocks from an account they held with UBS Financial, and invest the bulk of their retirement savings - $500,000 - in Medical Capital Notes.
The Rogases said Crawford touted Medical Capital Notes as a “safe investment” with promised returns, which is why the couple agreed to dramatically alter their portfolio in retirement. When the Rogases filed suit against Securities America and Ameriprise, Crawford was also named as a defendant.
“We were financially raped,” Rogas said in the article, which can be viewed in full here.
Dan retired in the late 1980’s, and says his retirement savings are nearly depleted. Instead of worrying about how to live happily and comfortably during the couple’s golden years, the Rogases now wonder how they will pay their bills in five years.
Print and online media have devoted thousands of articles to financial fraudsters in the past few years, especially since we are in an age abundant with Ponzi schemers. But not enough attention is paid to the victims of these terrible crimes.
Like the Rogases there are many victims who have saved their entire lives, only to lose their seed money to a broker they trusted. Investors are never at fault for being deceived by their brokers, a tragic fate to befall on anyone.
Bernie Madoff is facing a possible 150 years in federal prison-this is not just because of what he stole, but who he stole it from. Madoff, like Crawford, targeted friends and colleagues as investors. Neither of them showed much regard for the lives they were affecting.
We show only the utmost respect for victims of stock broker misconduct, which is why we are dedicated to helping people return on their lost investments.
