RCS Capital Corporation (NYSE: RCAP) Investor Securities Class Action Lawsuit 12/29/2014

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Company Name(s): 
RCS Capital
Case Name: 
RCS Capital Shareholder Class Action Lawsuit 12/29/2014
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Approved
Affected Securities
NYSE: RCAP
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
12/29/2014
Class Period Begin: 
02/12/2014
Class Period End: 
12/18/2014
Court of Filing: 
U.S. District Court for the Southern District of New York
Deadline To File for Lead: 
02/27/2015
Date Settled: 
06/20/2017
Settlement Amount: 
$31,000,000
Deadline to Participate in Settlement: 
11/02/2017
Summary: 

September 28, 2017 - The court approved the settlement.

June 20, 2017 - The court preliminarily approved the settlement.

June 2, 2017 - Parties filed a stipulation of settlement.

September 11, 2015 - Defendants filed a motion to dismiss.

June 30, 2015 - The lead plaintiffs filed an amended complaint on behalf of investors who purchased RCS Capital Corporation (NYSE: RCAP) common shares between February 12, 2014 and December 18, 2014. The lead plaintiffs allege that the defendants violated the Securities Act of 1933 and the Securities Exchange Act of 1934 by issuing false and misleading statements between February 12, 2014 and December 18, 2014.

March 31, 2015 - Lead plaintiffs and lead counsel were appointed.

February 27, 2015 - Lead plaintiff motions were filed.

December 29, 2014 - An investor in shares of RCS Capital Corporation (NYSE: RCAP) filed a lawsuit in the U.S. District Court for the Southern District of New York over alleged violations of Federal Securities Laws by RCS Capital Corporation in connection with certain allegedly false and misleading statements made between February 12, 2014 and October 31,2014.

According to the complaint the plaintiff alleges on behalf of purchasers of RCS Capital Corporation (NYSE: RCAP) common shares between February 12, 2014 and October 31, 2014, that the defendants violated Federal Securities Laws.

More specifically, the plaintiff claims that RCS Capital Corporation allegedly misled investors by failing to disclose that RCS Capital Corporation’s acquisition of Cole Capital from American Reality Capital Properties (“ARCP”) was at serious risk because an accounting fraud at ARCP of which RCS Capital Corporation’s Chairman, Nicholas Schorsch, should have been aware, that RCS Capital Corporation’s expected revenue stream from its relationship with ARCP might be disrupted as a result of the accounting fraud at ARCP, and that RCS Capital Corporation’s statements about its anticipated profitability and its plan to acquire Cole Capital were false and misleading.

RCS Capital Corporation reported that its annual Total Revenue rose from $114.13 million in 2010 to $886.50 million in 2013 and that its Net loss of $2.38 million in 2010 turned into a Net Income of $2.60 million in 2013.

Shares of RCS Capital Corporation (NYSE: RCAP) grew from $16.83 per share in late 2013 to as high as $$38.59 per share in April 2014.

On October 1, 2014 / RCS Capital Corporation (NYSE: RCAP) announced that it has entered into a definitive agreement to acquire Cole Capital Partners, LLC and Cole Capital Advisors, Inc. (together, "Cole Capital") from American Realty Capital Properties, Inc. (NASDAQ: ARCP) ("ARCP") for $700 million plus contingent consideration.

On October 29, 2014, ARCP disclosed that its financial statements were materially inaccurate and must be restated.

Then on November 3, 2014, RCS Capital Corporation (NYSE: RCAP) announced that "it has terminated the previously disclosed definitive agreement to acquire Cole Capital Partners, LLC and Cole Capital Advisors, Inc. (together, "Cole Capital") from American Realty Capital Properties, Inc. Shares of RCS Capital Corporation (NYSE: RCAP) declined to as low as $10.80 per share on November 4, 2014 and continued to decline to as low as $9.26 per share on December 2, 2014.

On January 9, 2015, NYSE: RCAP shares closed at $11.21 per share.