Weston v. RCS Capital Corporation

Settled: September 28, 2017

A $31 million settlement in this securities class action was reached with the defendants. 

Labaton Sucharow is co-lead counsel in this securities class action against RCS Capital Corporation (RCAP), a New-York based financial services firm.

The action arises from the accounting fraud at one of RCAP's affiliates, American Realty Capital Properties, Inc. (ARCP), which was perpetrated and concealed by senior management of ARCP and RCAP, including Nicholas Schorsch, ARCP's former Chairman and RCAP's former Executive Chairman. In particular, the plaintiffs generally allege that the defendants' failure to fully disclose the fraud rendered their statements from February 12, 2014 through December 18, 2014 (the class period) regarding RCAP's financial position and outlook false and misleading. As a result, RCAP is alleged to have caused its stock to trade at artificially inflated prices during the class period. 

The case is Weston v. RCS Capital Corporation, No. 14-cv-10136 (S.D.N.Y.). The lead plaintiffs are City of Providence and Oklahoma Police Pension Fund and Retirement System. Labaton Sucharow represents the City of Providence. The defendants are RCS Capital Corporation and certain of its affiliates, officers and directors.

The lead plaintiffs filed an amended complaint on June 1, 2015 and a corrected amended complaint on June 30, 2015. The defendants’ motions to dismiss were filed on September 11, 2015, the lead plaintiffs filed an opposition to the defendants’ motions on October 26, 2015, and the defendants’ reply papers were filed on November 16, 2015. 

On April 21, 2016, the Court heard oral argument on the motions to dismiss. Immediately following the argument, the Court scheduled a settlement conference for June 30, 2016. On June 27, 2016, the parties informed the Court of their agreement to explore mediation and accordingly requested that the June 30, 2016 settlement conference be adjourned to allow them to engage in settlement negotiations before a mediator.  

On March 20, 2017, after arm’s-length negotiations under the auspices of Mr. Robert A. Meyer, a well-respected and highly experienced mediator, followed by a mediator’s proposal, the parties reached an agreement-in-principle to settle the case for $31 million (all cash). The Court granted final approval to the settlement on September 28, 2017.

Submit Proof of Claim

If you purchased or otherwise acquired the common stock of RCAP during the period from February 12, 2014 through December 18, 2014, inclusive, you may be entitled to receive money from the proposed settlement.

To be eligible for a payment, you must submit a Claim Form by November 2, 2017 in accordance with the instructions set forth in the Notice.

Settlement Fairness Hearing                             

A Settlement Fairness Hearing was held on September 28, 2017 at 10:00 a.m. before the Honorable George B. Daniels in Courtroom 11A at the United States District Court for the Southern District of New York, Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, New York, NY 10007.

If you have questions about the settlement, please contact Labaton Sucharow at settlementquestions@labaton.com or 1-888-219-6877, or contact the Claims Administrator, AB Data at (866) 778-9626.