In a move Massachusetts securities regulators are calling an attempt to
delay proceedings based on a "dangerous false presumption,"
Securities America is asking the Court to subpoena other broker-dealers
that sold Medical Capital notes, according to Investment News.
Last January, Massachusetts regulators sued Securities America for allegedly
misleading investors regarding Medical Capital
private placements. While Securities America was the largest broker-dealer involved in the
sale of the notes, dozens of other broker-dealers sold them as well.
According to the June 9 Investment News article, the Massachusetts Securities
Division believes that Securities America's request is an attempt
to establish a so-called industry standard, which the firm believes will
show they operated in the same manner as did other broker-dealers selling
The regulators' May 28 motion in response denied that industry standard
plays a role in the Securities America case and stated that the firm is
under the false impression that "its duty to disclose information
to investors is determined by what other broker-dealers...disclosed to
The next step in the case is an administrative hearing scheduled for July.