Ready Capital Faces Securities Fraud Lawsuit Amid Investor Concerns

2025-04-13 companies

New York, Sunday, 13 April 2025.
The securities fraud lawsuit against Ready Capital could significantly impact investor confidence and its market valuation due to alleged misrepresentations of non-performing loans in its portfolio.

Overview of the Lawsuit

Ready Capital Corporation (NYSE: RC) is currently embroiled in a securities fraud lawsuit that has significant implications for its investor base and market standing. The lawsuit, filed in the U.S. District Court for the Southern District of New York, charges Ready Capital and certain executives with violating federal securities laws. The allegations center on the company’s reported misrepresentation of the health of its commercial real estate (CRE) loan portfolio, particularly with regard to non-performing loans, which were not sufficiently disclosed to investors [1][2][3].

Impact on Investor Confidence

The revelations concerning Ready Capital’s financial disclosures have rattled investor confidence. On March 3, 2025, the company reported a net loss of $1.80 per share for Q4 2024 and a full-year loss of $2.52 per share. In conjunction with this financial report, Ready Capital disclosed a $284 million charge due to non-performing loans, causing the stock to plummet by nearly 27% from $6.93 to $5.07 per share [1][4][5]. This significant drop illustrates the severe impact these disclosures have had on shareholder value and market perception.

Legal and Financial Ramifications

The legal proceedings surrounding Ready Capital are gaining momentum as investors are encouraged to lead the lawsuit or submit claims if they suffered substantial losses during the designated class period, from November 7, 2024, to March 2, 2025. The deadline for lead plaintiff applications is May 5, 2025, further intensifying the pressure on shareholders to take decisive action. As the legal battle unfolds, the potential financial liabilities for Ready Capital could pivotally influence its ability to maintain market stability [2][3][6].

Market and Shareholder Actions

Law firms such as Faruqi & Faruqi, LLP, Hagens Berman, and Kahn Swick & Foti, LLC are actively pursuing the case, aiming to hold the company accountable for misleading investors. The unfolding case of Quinn v. Ready Capital Corporation, et al., underscores the critical scrutiny companies face regarding transparent financial reporting. The lawsuit’s progression is closely monitored by market analysts, as outcomes could dictate broader industry practices surrounding CRE portfolio reporting and valuations [3][4][6].

Sources

securities fraud Ready Capital