#USA #Robbins Geller #San Diego #Ready Capital #Broadmark Realty

Investors File Class Action Lawsuit Against Broadmark Realty Capital

Overview
A significant development in the investment landscape has emerged as Robbins Geller Rudman & Dowd LLP has formally announced a class action lawsuit against Broadmark Realty Capital Inc. (NYSE: BRMK) and Ready Capital Corporation (NYSE: RC). This legal action stems from a concerning merger that took place in May 2023, where it was alleged that misleading statements were made to gain shareholder approval. Investors who held shares of Broadmark's common stock as of the merger's record date are invited to step forward in response to this class action lawsuit. The deadline to seek lead plaintiff status is set for July 28, 2025.

The Lawsuit's Focus
The class action lawsuit, titled Grant v. Broadmark Realty Capital, No. 25-cv-01013 (W.D. Wash.), claims that Broadmark Realty and Ready Capital, along with some executives and directors from both companies, violated the Securities Exchange Act of 1934. The allegations suggest that crucial information was not disclosed to shareholders, leading to substantial losses once the true financial situation of both companies was revealed. According to the claim, significant financial distress was affecting a large number of borrowers within Ready Capital's portfolio, primarily due to rising interest rates that escalated their borrowing costs.

Key Allegations Against Ready Capital
The lawsuit lists several critical issues:

• - A significant number of borrowers were suffering due to escalating interest rates.
• - Ready Capital faced an oversupply of multifamily properties, constraining borrowers’ abilities to raise rents adequately.
• - A major project connected to Ready Capital incurred extensive setbacks, characterized by budget overruns, construction delays, and inadequate funding.
• - The lawsuit alleges that these factors critically undermined the accuracy of Ready Capital's expected credit losses, resulting in significantly flawed financial projections regarding earnings and dividends.

As the class action lawsuit progresses, it has been noted that the stock price of Ready Capital continues to stay considerably below the merger price, further enforcing the claims raised in the lawsuit. This has raised serious concerns regarding the accountability of Broadmark Realty and Ready Capital for their management practices leading up to the merger.

Lead Plaintiff Opportunity
The Private Securities Litigation Reform Act of 1995 offers a pathway for investors who held shares of Broadmark's stock during the specified period to seek lead plaintiff status. The lead plaintiff typically holds the most significant financial interest in the case and must represent the class adequately. Being appointed as a lead plaintiff, they direct the course of the lawsuit and select a law firm for representation. However, it’s important to note that participating as a lead plaintiff does not limit an investor’s ability to secure future financial recoveries from the lawsuit.

About Robbins Geller
Robbins Geller Rudman & Dowd LLP stands out as one of the preeminent law firms specializing in securities fraud and shareholder litigation. For four of the last five years, the firm has been ranked #1 in securing the highest monetary relief for investors in class action lawsuits related to securities—totaling over $2.5 billion in 2024 alone. With 200 attorneys spread across ten offices, Robbins Geller has played a pivotal role in many of the largest recoveries in securities litigation history, including the notable $7.2 billion recovery in the Enron case.

As the situation progresses, affected investors are encouraged to stay informed and to explore their options regarding this class action lawsuit. Interested parties can reach out to the attorneys at Robbins Geller for further guidance and support.