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Rosen Law Firm has reminded purchasers of RCS Capital Corporation securities (NYSE:RCAP) during the period from February 12, 2014 through October 31, 2014 of the important February 27, 2015 lead plaintiff deadline in the class action.
The class action asserts that RCS Capital misled investors by failing to disclose: (i) that RCS Capital’s acquisition of Cole Capital from American Realty Capital Properties was at serious risk as a result of an accounting fraud at ARCP, of which RCS Capital’s Chairman, Nicholas Schorsch, should have been aware, (ii) RCS Capital’s expected revenue stream from its relationship with ARCP might be disrupted as a result of the accounting fraud at ARCP, and (iii) RCS Capital’s statements about its anticipated profitability and its plan to acquire Cole Capital were false and misleading.
On October 29, 2014, ARCP disclosed that its financial statements were materially inaccurate and must be restated. ARCP admitted that it knew of certain of the errors and intentionally did not correct them. This resulted in the resignation of ARCP’s Chief Financial Officer and Chief Accounting Officer and, according to news reports, a criminal investigation by the FBI.
As a result of ARCPs accounting scandal, RCS Capital terminated its agreement to acquire Cole Capital from ARCP. This news caused shares of RCS Capital to drop $2.72/share or more than 16%. And on November 7, 2014, news reports that Massachusetts regulators were investigating RCS Capital in connection with the ARCP accounting scandal caused RCS Capital’s shares to drop another $0.65/share. On December 15, 2014, Nicholas Schorsch resigned as Chairman of ARCP and this news caused RCS Capital’s share price to drop another $1.35/share, further damaging investors.
