Securities America, a subsidiary of Ladenburg Thalmann, has agreed to pay $1 million to investors – many of them elderly - who lost millions investing in promissory notes issued by Medical Capital, a company that defaulted on the notes and went into bankruptcy in 2008. Securities America had sold nearly $700 million of promissory notes issued by Medical Capital from 2003 to 2008 – for which it earned over $26 million in commissions.

Earlier, the broker-dealer paid $2.8 million in restitution to Massachusetts residents who purchased the notes. And, in 2011, Securities America paid $150 million to settle arbitration cases and SEC charges related to 2 series of private placements – Medical Capital and Provident Royalties.  At that time, Securities America was owned by Amerirpise.

It was noted that sales of the promissory notes should have been limited to “sophisticated and accredited investors,” and they should not have made their way into retirement brokerage accounts,