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 notes.
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 their investors."
The next step in the case is an administrative hearing scheduled for July.