IRVINE — DVI Health Services, which once issued stock through a New York brokerage that the government recently charged with fraud, said Wednesday that it will issue 2 million more common shares through other brokers.
DVI hopes to raise up to $30 million to repay short-term debt in a revolving credit account, said David Higgins, president of Irvine-based DVI, a provider of health-care services and financial services to the medical industry. The shares, to be issued later this year, would be sold at the market rate at the time of sale.
Stratton Oakmont Inc., a brokerage firm based in Lake Success, N.Y., on Friday was charged by the Securities and Exchange Commission with defrauding customers by manipulating stock prices, falsely representing the merits and risks of penny stocks it sells and exaggerating its experience in such matters. The documents were filed in Federal District Court in Manhattan.
Stratton Oakmont has said it will defend itself against the allegations.
DVI's stock fell 87.5 cents Friday in heavy trading over the counter, to close at $11. By the end of trading Wednesday, it had rebounded slightly to $11.50.
"The fact is that this new issue moves us further away from" former broker Stratton Oakmont, Higgins said.
The company said it has hired as underwriters Chicago Corp. in Chicago and San Francisco-based W.I.G. Securities. The registration also includes an overallotment option, permitting sale of 300,000 more shares.
The company said it will eventually use the revolving account to obtain money for general corporate purposes, including new investments in outpatient health-care facilities.
Two other Irvine companies have also sold shares through Stratton Oakmont: IPS Healthcare Inc. and Ropak Laboratories Inc.