The information contained on this web page is only a summary of
information presented in more detail in the Notice of Pendency of Class Action,
Proposed Settlement, and Motion for Attorneys’ Fees and Expenses (the
“Notice”), which you can access by clicking here. Since this website is just a summary, you
should review the Notice for additional information.
If you are a Settlement
Class Member, your legal rights will be affected by the Settlement whether you
act or do not act.
Please read
the Notice carefully.
IF YOU PURCHASED OR OTHERWISE ACQUIRED THE COMMON
STOCK OF RCS CAPITAL CORPORATION DURING THE PERIOD FROM FEBRUARY 12, 2014 TO
DECEMBER 18, 2014, INCLUSIVE, AND WERE ALLEGEDLY DAMAGED THEREBY, YOU MAY BE
ENTITLED TO A PAYMENT FROM A CLASS ACTION SETTLEMENT.
IMPORTANT DATES AND DEADLINES
|
REMAIN
A MEMBER OF THE SETTLEMENT CLASS AND SUBMIT A CLAIM FORM RECEIVED NO LATER
THAN NOVEMBER 2, 2017
|
The only way to be eligible to
receive a payment from the Net Settlement Fund.
|
EXCLUDE YOURSELF
FROM THE SETTLEMENT CLASS BY SUBMITTING A WRITTEN REQUEST FOR EXCLUSION RECEIVED
NO LATER THAN
AUGUST
29, 2017
|
Will
not be eligible to receive any payment from the Net Settlement Fund. This is the only option that, assuming your
claim is timely brought, might allow you to ever bring or be part of any
other lawsuit against Defendants and/or the other Released Defendant Parties
concerning the Released Plaintiffs’ Claims.
|
OBJECT TO THE
SETTLEMENT BY SUBMITTING WRITTEN OBJECTIONS RECEIVED NO LATER THAN AUGUST 29,
2017
|
Write
to the Court about why you do not like the Settlement, the Plan of
Allocation, and/or Lead Counsel’s motion for attorneys’ fees and payment of
Litigation Expenses. If you object,
you will still be a member of the Settlement Class.
|
GO TO A HEARING ON SEPTEMBER 28, 2017, AT 10:00 A.M., AND FILE A NOTICE OF
INTENTION TO APPEAR, RECEIVED NO LATER THAN AUGUST 29, 2017
|
Ask to speak in Court about the
Settlement. If you submit an
objection, you may (but you do not have to) attend the hearing and, at the
discretion of the Court, speak in Court about your objection.
|
DO
NOTHING
|
Will not be eligible to receive a payment
from the Net Settlement Fund, will give up rights, and will still be bound by
the Settlement.
|
The Settlement Hearing
A
hearing will be held before the Honorable George B. Daniels of the United
States District Court for the Southern District of New York, Daniel Patrick
Moynihan United States Courthouse, Courtroom 11 A, 500 Pearl Street, New York,
NY 10007 at 10:00 a.m. on September 28, 2017 to, among other things, determine
whether the Court should: (i) approve the proposed Settlement as fair,
reasonable, and adequate; (ii) dismiss the Action with prejudice as provided in
the Stipulation and Agreement of Settlement, dated June 2, 2017; (iii) approve
the proposed Plan of Allocation for distribution of the Net Settlement Fund;
and (iv) approve Lead Counsel’s application for an award of attorneys’ fees and
payment of Litigation Expenses. The
Court may change the date of the Settlement Hearing without providing another
notice. You do NOT need to attend the
Settlement Hearing to receive a distribution from the Net Settlement Fund.
The
papers will be posted to this website under the “Court Documents” link on the
left.
What is this case
about?
The
Action arises from an alleged accounting fraud at American Realty Capital
Properties, Inc. (“ARCP”), a public real estate investment trust that shared a
number of directors with RCAP, which was allegedly perpetrated and concealed by
Defendant Schorsch (co-founder of RCAP and Executive Chairman of RCAP’s board
of directors) and other senior management of ARCP. RCAP is a wholesale broker-dealer and
investment banking and advisory business, with the majority of its revenues
during the Class Period generated from services provided to AR Capital, LLC
(“ARC”), a real estate management company that also shared a number of
directors with RCS. Those services
included the wholesale distribution of ARC’s investment products. Throughout the Class Period, Defendants,
among other things, allegedly made false and misleading statements and
omissions regarding the strength of RCAP’s business prospects, emphasizing
RCAP’s ability to leverage its relationship with Schorsch-related entities.
On
June 1, 2015, Lead Plaintiffs filed an Amended Class Action Complaint for
Violations of Federal Securities Laws, and, on June 30, 2015, Lead Plaintiffs
filed the operative Corrected Amended Class Action Complaint for Violations of
Federal Securities Laws (the “Complaint”), asserting claims under Sections 11,
12(a)(2), and 15 of the Securities Act of 1933 (the “Securities Act”) and
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange
Act”) and Rule 10b-5 (17 C.F.R. §240.10b-5) promulgated thereunder. In general, the Complaint alleged that
Defendants violated the federal securities laws by making materially false and
misleading statements and omissions concerning the strength of RCAP’s core
wholesale distribution and investment banking business and its prospects for
success. As alleged in the Complaint,
because of the alleged entanglement of RCAP, ARCP, and ARC, and the fact that
investors associated all of those entities with Defendant Schorsch, the alleged
accounting manipulations that occurred at ARCP undercut the credibility,
reputation, and business operations of RCAP, as well as ARCP, and rendered
Defendants’ statements concerning the strength of RCAP’s wholesale distribution
and investment banking business and its prospects for growth success, false and
misleading. The Complaint further alleged
that the price of RCAP common stock was artificially inflated as a result of
Defendants’ allegedly false and misleading statements, and declined when the
truth was revealed.
In
September 2016, the Parties engaged Mr. Robert A. Meyer, a well-respected and
highly experienced mediator, to assist them in exploring a potential negotiated
resolution of the claims in the Action.
On November 14, 2016, the Parties participated in a full-day mediation
session with Mr. Meyer in an attempt to reach a settlement. In advance of the mediation session, the
Parties provided detailed mediation statements and exhibits to the Mediator
which addressed the issues of both liability and damages. Following arm’s-length and mediated negotiations
under the auspices of Mr. Meyer, on March 20, 2017, the Parties reached an
agreement-in-principle to settle the Action.
In
light of the Settlement and the guaranteed cash recovery to the Settlement
Class, Lead Plaintiffs and Lead Counsel believe that the proposed Settlement is
fair, reasonable, and adequate, and in the best interests of the Settlement
Class.
The Settlement
Benefits
Defendants
have agreed to cause a $31 million cash payment to be made, which, along with
any interest earned on this amount, will be distributed after deduction of
Court-awarded attorneys’ fees and Litigation Expenses, Notice and
Administration Costs, Taxes, and any other fees or expenses approved by the
Court (the “Net Settlement Fund”), among all Settlement Class Members who
submit valid Claim Forms and are found by the Court to be eligible to receive a
distribution from the Net Settlement Fund (“Authorized Claimants”).
If
the Settlement is approved by the Court, the Net Settlement Fund will be
distributed to eligible Authorized Claimants in accordance with the proposed
Plan of Allocation or such other plan of allocation as the Court may
approve. Settlement Class Members who do
not timely submit valid Claim Forms will not share in the Net Settlement Fund,
but will otherwise be bound by the Settlement.
The Court may approve the proposed Plan of Allocation, or modify it,
without additional notice to the Settlement Class. Any order modifying the Plan of Allocation
will be posted on this website.
The Rights of Settlement
Class Members
If
you are a Settlement Class Member, you have the following options:
Submit
a Claim Form
To
qualify for a payment from the Net Settlement Fund, you must submit a timely
and valid Claim Form and supporting documentation. A Claim Form is included with the Notice or
you may download a Claim Form under the “Claim Form” link on the left. You
may also file a Claim Form online under the “File Online Claim Form” link on
the left by November 2, 2017. You
may also request a Claim Form by calling (866) 778-9626 or e-mailing info@casespecificemail.com.
The Claim Form and the required documents must be sent to the address printed in the Claim Form or submitted online
and must be postmarked or received no later than November 2, 2017.
Exclude yourself from
the Settlement Class
If you are a member of the Settlement Class
and wish to exclude yourself from the Settlement Class, you must submit a
request for exclusion such that it is received no later than August 29, 2017,
in accordance with the instructions set forth in the Notice. If you ask to be
excluded, do not submit a Claim Form because you cannot receive any payment
from the Net Settlement Fund. Also, you
cannot object to the Settlement because you will not be a Settlement Class
Member. However, if you submit a valid
exclusion request, you will not be legally bound by anything that happens in
the Action, and you may be able to sue (or continue to sue) Defendants and the
other Released Defendant Parties in the future
Object
to the Settlement
If you are a Settlement Class
Member, you can object to the Settlement or any of its terms, the proposed Plan
of Allocation of the Net Settlement Fund, and/or Lead Counsel’s application for
an award of attorneys’ fees and Litigation Expenses. Any objections must be filed with the Court no later than August 29, 2017 and
mailed or delivered to Lead Counsel for the Settlement Class and
Defendants’ Counsel so that it is received
no later than August 29, 2017, in
accordance with the instructions set forth in the Notice.
File a
Notice of Intention to Appear
You may ask the Court for
permission to speak at the Settlement Hearing.
To do so, you must include with your objection, no later than August 29, 2017, a statement that you, or your
attorney, intend to appear in “Weston v.
RCS Capital Corporation, No. 1:14-CV-10136 (S.D.N.Y.).” Persons who intend to present evidence at the
Settlement Hearing must also include in their objections (prepared and
submitted in accordance with the instructions set forth in the Notice) the
identities of any witnesses they may wish to call to testify and any exhibits
they intend to introduce into evidence at the Settlement Hearing. You may not speak at the Settlement Hearing
if you exclude yourself from the Settlement Class or if you have not provided
written notice of your objection and intention to speak at the Settlement
Hearing in accordance with the instructions set forth in the Notice.
Do
Nothing
If you choose this option, you will receive no money from the
Settlement and you will be precluded from starting a lawsuit, continuing with a
lawsuit, or being part of any other lawsuit against Defendants and the other
Released Defendant Parties concerning the Released Plaintiffs’ Claims. To share in the Net Settlement Fund, you must
submit a Claim Form. To start, continue,
or be a part of any other lawsuit against Defendants and the other Released
Defendant Parties concerning the Released Plaintiffs’ Claims, you must exclude
yourself from the Settlement Class.
Further Information:
This
website and the Notice summarizes the Settlement. For more details
regarding the Settlement please reference the Stipulation and Agreement of
Settlement, or other documents filed in the case under the “Court Documents”
link on the left. You may also contact the Claims Administrator or Lead
Counsel for further information regarding the Settlement:
Claims Administrator:
RCAP Securities Litigation
c/o A.B. Data, Ltd.
PO Box 173040
Milwaukee, WI 53217
(866) 778-9626
info@casespecificemail.com
www.RCAPSecuritiesSettlement.com
Lead Counsel:
Labaton Sucharow LLP
Ira A. Schochet, Esq.
140 Broadway
New York, NY 10005(888) 219-6877settlementquestions@labaton.com
www.labaton.com
Scott+Scott, Attorneys at Law, LLP
Deborah Clark-Weintraub, Esq.
The Helmsely Building
230 Park Avenue, 17th Floor
New York, NY 10169
(800) 404-7770
If
you have questions, you may call the RCAP Securities Litigation Help Line at (866)
778-9626 or email info@casespecificemail.com.