On May 10, 2010, the court-appointed SEC receiver for the Medical Capital investment fraud filed his tenth monthly status report. The Receiver successfully has collected nearly $100 million in cash for the Medical Capital estate, but Medical Capital investors still stand to lose approximately $1 billion.
Primarily through the sale of assets, the SEC receiver has been able to collect approximately $98.5 million for the Medical Capital estate. But nearly $10 million of that amount already has been spent on operating expenses and nearly $1 million has been used to pay professional fees associated with the receivership. As such, only approximately $89 million of the nearly $100 million collected remains available to be distributed to Medical Capital investors. And there will continue to be additional operating expenses and professional fees that must be paid from the Medical Capital estate. Investors are still owed nearly $1.1 billion. As such, even considering the money that already has been collected, we expect that Medical Capital investors still stand to lose approximately $1 billion as a result of the Medical Capital fraud.
One of Medical Capital’s allegedly improper expenditures was for the production of a movie titled “The Perfect Game,” which is about a group of young Mexican boys who became the first non-U.S. team to win the Little League World Series. The release of that movie was hoped to bring in additional cash for the Medical Capital estate. But while the movie has been well received by critics, box office receipts have not met projections.
Nothing new has been reported that contradicts prior beliefs that Medical Capital was a Ponzi scheme. As such, we remain of the belief that anyone who bought a Medical Capital note appears to have bought a fraudulent investment product. If you purchased Medical Capital notes from a brokerage firm such as Securities America or QA3 Financial, Dimond Kaplan & Rothstein, P.A. continues to believe that the best opportunity to recover Medical Capital investment losses is to file a FINRA arbitration claim against the brokerage firm. The crux of such claims is that the brokerage firm failed to conduct adequate due diligence before approving and selling Medical Capital notes to investors. The law firm’s Medical Capital lawyers have filed dozens of FINRA arbitration claims against brokerage firms on behalf of Medical Capital investors who have lost tens of millions of dollars. The firm expects that documents acquired as a result of a lawsuit filed by the Commonwealth of Massachusetts in a regulatory proceeding against Securities America will assist the firm in helping investors recover their Medical Capital investment losses.