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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) 219-6877
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

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