Bank of NY Mellon Settles Medical Capital Claims
The Bank of NY Mellon (“BNY Mellon”), the world’s largest custodial bank, has agreed to settle allegations in a class action that it breached its fiduciary duties in connection with its role as trustee of failed Medical Capital Holdings, Inc. private placements. The settlement, which is subject to court approval, involves payment of $114 million by BNY Mellon. Papers filed in the U.S. District Court in California reflect that of the settlement amount, approximately $90.68 million would go to class members, with the remainder to be split by their lawyers.
Related claims in the class-action against Wells Fargo & Co, an additional trustee for some Medical Capital debt, remain pending.
Medical Capital was a medical-receivables company that raised in excess of $1.7 billion through sales of private placements between 2003 and 2009, when the SEC charged the company and its top executives with fraud.
Securities America, Inc., the largest seller of the Medical Capital private placements settled the class action litigation involving its role in the Medical Capital notes in 2011 for approximately $80 million.