Ready Capital Corporation (RC) Securities Class Action

If you invested in Ready Capital and have substantial losses, or have knowledge that may assist the firm’s investigation, submit your losses »

CLASS PERIOD
11/07/2024 - 03/02/2025

LEAD PLAINTIFF DEADLINE
05/05/25

RELATED DOCUMENTS
Complaint 03/06/25

STOCK SYMBOL
NYSE: RC

The litigation is focused on the propriety of Ready Capital’s statements about the quality of its commercial real estate (“CRE”) loans, its Current Expected Credit Loss (“CECL”) reserves and allowances, and its book value. These metrics are important, given the size of Ready Capital’s loan portfolio has more than doubled since 2023.

In the past, Ready Capital has assured investors that its CRE portfolio has displayed “stabilizing credit metrics” and its decisions with respect to CECL and allowance for credit losses were reasonable when made.

The complaint alleges that Ready Capital made false and misleading statements while failing to disclose crucial information to investors. Specifically, the suit alleges that:

Ready Capital failed to disclose that significant non-performing CRE loans were not likely to be collected;
The company would be required to fully reserve against these problem loans to “stabilize” its balance sheet;
This was not accurately reflected in the company’s credit loss or valuation allowances; and
As a result, the company’s financial results would be adversely impacted.

Investors learned the truth on Mar. 3, 2025, when Ready Capital announced dismal Q4 and FY 2024 financial results, including a quarterly net loss per share of $1.80, an annual net loss of $2.52 per share, a 50% cut to its quarterly dividend, and a 16% book value reduction.

Ready Capital blamed the results on having to take “decisive action to stabilize” its “balance sheet going forward by fully reserving for all of our non-performing loans in our CRE portfolio.” This included recording a 700% increase in reconciling items compared to the prior-year quarter totaling about $382 million. These included about $277 million in combined CECL and valuation allowances, a whopping 8500% increase from the prior-year quarter.

This news drove the price of Ready Capital shares down almost 27% on Mar. 3, 2025.

FREQUENTLY ASKED QUESTIONS ABOUT THE CASE

What is the RC investigation about?: We are investigating whether Ready Capital may have misled investors about the quality of its underwriting, credit monitoring, and loan portfolio.

WHAT SHOULD I DO?

I worked at RC. What should I do?: If you were an employee of RC, you may have valuable information that could be relevant to the investigation. Hagens Berman is one of the nation’s top whistleblower law firms, and has successfully represented many individuals who come forward with information regarding corporate malfeasance. Under the new SEC Whistleblower program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, contact Reed Kathrein at 844-916-0895 or RC@hbsslaw.com.
There are multiple law firms participating, do I need to contact all of them?: No, you do not need to contact all participating law firms. Generally, class-action investigations and lawsuits are consolidated into a single case to streamline the legal process, and attorneys from only a few law firms are selected to serve in a leadership role on the consolidated case. Hagens Berman has a proven track record of being appointed to leadership roles in complex, multidistrict litigation regarding investor fraud and other consumer rights issues, and your claim will be handled by attorneys who have helped secure approximately $325 billion in class-action settlements on behalf of individuals who have suffered due to corporate malfeasance and the wrongdoing of other powerful institutions.

AM I ELIGIBLE?

What is the threshold amount to be eligible? What are “substantial” losses?: The threshold amount and the definition of "substantial" losses may vary depending on a number of factors specific to the case, including the size of the company, market cap, shares outstanding and who holds them and the damages alleged by the fraud. In general, to be eligible to participate in a class-action lawsuit, you must be able to demonstrate that you suffered financial losses as a result of the alleged wrongdoing and that your losses meet the criteria set by the court or law firm. Fill out the form and submit your losses.

CAN I PARTICIPATE?

Am I affected? What do I need to do to participate?: If you were an investor in RC, you may be affected and eligible to participate in the case. To determine your eligibility and potential involvement, fill out the form and submit your losses.
Can any RC investor participate?: In most class-action investigations and cases, any investor who meets the eligibility criteria, including purchasing the shares during the relevant period, can participate, regardless of the size of their investment. Fill out the form to find out your rights.
I bought on a non-U.S. Exchange. Can I participate?: No. This investigation only covers shares bought on a U.S. exchange, i.e. NASDAQ or NYSE. Fill out the form to find out your rights.
Am I included if I still hold my shares, or do I need to sell to participate?: Participation is based on purchasing shares during the relevant period, rather than your current holdings. Accordingly, you do not need to sell to participate. Fill out the form to find out your rights.

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