Hantz Financial Services, a mid-sized firm based in Michigan with 260 affiliated advisers, is no longer under the legal radar for selling MedCap notes to investors. A recent report revealed that Hantz Financial sold MedCap notes to 300 clients, who could have over $20 million in combined damages against the firm. The MedCap fallout stems from a $2.2 billion Ponzi scheme built on shaky medical receivables that the Securities and Exchange Commission shut down in July 2009. This news comes after a private placement debacle that swept through the independent broker-dealer industry and forced dozens of small to mid-size firms to close. This particular revelation is quite surprising seeing as it has been several months since InvestmentNews and other industry publications have covered the story in any significant way - most likely because a certain amount of stability has returned to the market.
A Ponzi scheme is an unsustainable fraud pyramid that inevitably ends in ruin. Schemers use money raised from latter investors or investors higher up the pyramid to pay an earlier investor's returns. Ponzi schemes invariably fall apart when markets deteriorate or when the schemer is unable to raise more cash.
Due diligence requires a reasonable investigation of all material facts before entering into an agreement or transaction with another person or entity. It is a measure taken to prevent unnecessary harm to an innocent party. The measure would require an entity offering and selling a security to analyze the legitimacy, nature, and risks associated with the product.
Hantz Financial had a duty to investigate MedCap before offering and selling the private placement to its clients. If broker-dealers such as Hantz Financial do not perform adequate due diligence, they can be liable to investors for damages. Hantz Financial's failure to perform due diligence caused hundreds of its clients to lose millions of dollars in MedCap. Therefore, investors are encouraged, and are certainly entitled, to file arbitration claims against Hantz Financial to recover losses incurred due to the massive Ponzi scheme that defrauded thousands of MedCap investors.
Have you suffered losses in MedCap notes sold by Hantz Financial Services Inc.? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
A Ponzi scheme is an unsustainable fraud pyramid that inevitably ends in ruin. Schemers use money raised from latter investors or investors higher up the pyramid to pay an earlier investor's returns. Ponzi schemes invariably fall apart when markets deteriorate or when the schemer is unable to raise more cash.
Due diligence requires a reasonable investigation of all material facts before entering into an agreement or transaction with another person or entity. It is a measure taken to prevent unnecessary harm to an innocent party. The measure would require an entity offering and selling a security to analyze the legitimacy, nature, and risks associated with the product.
Hantz Financial had a duty to investigate MedCap before offering and selling the private placement to its clients. If broker-dealers such as Hantz Financial do not perform adequate due diligence, they can be liable to investors for damages. Hantz Financial's failure to perform due diligence caused hundreds of its clients to lose millions of dollars in MedCap. Therefore, investors are encouraged, and are certainly entitled, to file arbitration claims against Hantz Financial to recover losses incurred due to the massive Ponzi scheme that defrauded thousands of MedCap investors.
Have you suffered losses in MedCap notes sold by Hantz Financial Services Inc.? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
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