Ameriprise Financial Inc., two of its Securities America units and a group of investors who sued them asked a U.S. judge to approve a proposed $80 million cash settlement.
Ameriprise Financial Inc., two of its Securities America units and a group of investors who sued them asked a U.S. judge to approve a proposed $80 million cash settlement.
The investors had bought stock and partnership interests in Provident Royalties LLC, an owner of working interests in oil and natural gas properties, through Securities America from September 2006 through January 2009. They also bought notes issued by so-called special purpose entities affiliated with Medical Capital Holdings Inc., a company that bought accounts receivable, according to papers filed yesterday with U.S. District Judge W. Royal Furgeson in Dallas.
Those who invested in Medical Capital, which was later sued by the U.S. Securities and Exchange Commission for misappropriation of investor funds, lost about $284 million on the special purpose notes. Securities America sold about 37% of those notes, according to the investors' filing. Provident investors lost $46 million when that company went bankrupt.
“The class action settlement will allow investors to recover a meaningful percentage of their losses,” their attorneys told the court.
Ameriprise, a Minneapolis-based company spun off from American Express Co. in 2005, and its Securities America units have also agreed to pay $70 million to investors who filed claims for arbitration and rather than in the courts.
--Bloomberg News--
