First Medical Capital Arbitration Award Decided

Those notes are at the center of a Securities and Exchange Commission fraud complaint issued last summer. The SEC charged Medical Capital Holdings Inc., the parent company of the issuer, with fraud in the sale of $77 million in notes. Dozens of independent broker-dealers sold the notes.

A scan of the Finra database of arbitration awards shows that this is the first award involving "Medical Provider Funding VI," the last in a series of offerings that raised $2.2 billion from investors. About $1 billion in investor money has most likely been wiped out.

Several class actions are pending against broker-dealers that sold Medical Capital notes. In addition, investors have filed hundreds of arbitration claims against individual broker-dealers who sold those notes or other private placements that eventually imploded.

The award in arbitration matched the claim: $400,000. It is extremely rare for investors to receive awards for the total amount of their claim.

Peak Securities lost its registration with the Financial Industry Regulatory Authority Inc. in November. The investor's award was a "default decision," said Nicholas D. Thomas, Ms. Hazell's attorney. Peak Securities failed to engage in the arbitration, he said, and a single arbitrator made the award.

Since Peak is no longer a registered broker-dealer, the next step in the claim will be an attempt to turn the arbitration award into a court judgment, Mr. Thomas said.

David Dube, the owner of Peak Securities, was not available Tuesday afternoon to comment.

Medical Capital is being dismantled by a court-appointed receiver.

For additional information, visit our website at www.securitiesarbitrations.com.   Nicholas J. Guiliano, Esquire.  (877) SEC-ATTY.  Contingent Fee.  Free Consultation.  Practice limited to representation of injured investors.