Finra sweeping B-Ds that sold private securities from Medical Capital Holdings

The Financial Industry Regulatory Authority Inc. is conducting a sweep to gather information from a number of broker-dealers that sold private securities of Medical Capital Holdings Inc., which the Securities and Exchange Commission last week charged with securities fraud. Medical Capital is a medical receivables firm based in Anaheim, Calif. On Thursday, the SEC charged the firm with fraud in the sale of $77 million in notes. The commission also brought charges against the firm's chief executive, Sidney Field, and its president and chief operating officer, Joseph Lampariello. According to the SEC's complaint, Medical Capital's problems could be far greater. Since last August, five of the firm's funds and affiliates have been in default or late in payments of principal or interest of $992.5 million in notes, commonly called private placements. Finra of New York and Washington sent an unknown number of broker-dealers the sweep notice the same day that the SEC filed charges against Medical Capital.