***IMPORTANT CASE UPDATE***
On December 5, 2022, residual distribution checks were mailed to Authorized Claimants who cashed their initial payment and were eligible to receive an additional payment under the Plan of Allocation. Please address any questions regarding your payment to the Claims Administrator.
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 |
SUBMIT A CLAIM: |
The deadline to submit a claim has passed. |
EXCLUDE YOURSELF: |
The deadline to exclude yourself from the Settlement has passed. |
OBJECT: |
The deadline to object to the Settlement has passed. |
GO TO HEARING: |
The Court held a final Settlement Hearing on September 28, 2017. |
The Settlement Hearing
The Court held a final Settlement Hearing on September 28, 2017, and approved the Settlement, proposed Plan of Allocation and the motion requesting attorneys' fees and expenses. A copy of the order can be accessed on the Court Documents section.
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.
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) 219-6877
settlementquestions@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.