Opinion ID: 2814736
Heading Depth: 3
Heading Rank: 2

Heading: The Cordaros Initiate the FINRA Action

Text: On November 18, 2009, the Cordaros filed a statement of claim with FINRA against Mr. Templeton, CapWest, USA, and USA’s principals for Mr. Templeton’s sales of the Triple Net, DBSI, MedCap II, and MedCap IV notes. The Cordaros demanded arbitration and sought to recover the $515,000 they had invested with Mr. Templeton, claiming that Mr. Templeton had sold them speculative securities without adequate investigation or disclosure. -6- The statement of claim described each of Mr. Templeton’s sales of securities to the Cordaros, including the MedCap IV note, as to which the Cordaros alleged: In 2007, when the [$100,000 MedCap II note] matured, respondent Templeton induced claimants to roll it over into a new, 7 year note for the same amount. By that time, Templeton was working for another broker dealer, CapWest Securities, which is named as a respondent herein by virtue of the offer and sale of that note to claimants. App. at 790. They alleged the prospectuses for both the MedCap II and MedCap IV sales were inadequate because they did not disclose lawsuits involving a MedCap Holding principal that should have been disclosed and because they included unsupported financial information. They further alleged that Mr. Templeton and CapWest should have known the MedCap IV investment was too risky because it was unsuitable for any customer “who was not a speculator,” and the Cordaros specifically told them that “preservation of capital was their primary invest[ment] objective.” Id.