Broadmark Realty Capital Investors File Class Action Lawsuit Over Alleged Misleading Statements in Merger Proxy Statement

Rosen Law Firm is investigating allegations that Broadmark Realty Capital Inc. (NYSE: BRMK) misled investors regarding its business operations, including false and/or misleading statements in the proxy statement used to solicit support for the May 30, 2023 merger with Ready Capital Corporation. The lawsuit claims that investors suffered damages when the true details entered the market. Shareholders who held common stock as of the record date may be eligible to participate in the class action and serve as lead plaintiff.

Title: Rosen Law Firm Investigates Alleged Misconduct by Broadmark Realty Capital Inc.

Rosen Law Firm has announced that a shareholder has filed a class action lawsuit against Broadmark Realty Capital Inc. (NYSE: BRMK), alleging that the company misled investors regarding its business operations during the May 30, 2023 merger with Ready Capital Corporation. The lawsuit claims that the proxy statement used to solicit support for the merger contained false and/or misleading statements, which resulted in investors suffering damages.

The Complaint, filed by Rosen Law Firm, alleges that Broadmark Realty Capital Inc. failed to disclose several critical issues, including:

1. Financial Distress of Borrowers: A significant portion of borrowers within Ready Capital's originated portfolio were experiencing severe financial distress due to high interest rates.
2. Market Oversupply: An oversupply of multifamily properties in Ready Capital's markets of operation had limited the ability of borrowers to raise rents to cover their growing debt costs.
3. Development Project Setbacks: A major development project acquired in Ready Capital's acquisition of Mosaic Real Estate Credit, LLC, Mosaic Real Estate Credit TE, LLC, and MREC International Incentive Split, LP (a Ritz-Carlton located in Portland, Oregon), experienced catastrophic setbacks, including significant cost overruns, construction delays, and funding shortfalls.
4. Understated Credit Losses: As a result of these issues, Ready Capital's Current Expected Credit Loss reserves and expected credit losses were materially understated.
5. False Financial Projections: Consequently, Ready Capital's financial projections regarding Distributable Earnings per share, dividends per share, and book value per share were not based in fact.

Shareholders who held common stock as of the record date may be eligible to participate in the class action. The deadline to seek appointment as lead plaintiff is July 28, 2025. Rosen Law Firm advises investors to contact them for more information or to submit a form at their website.

Rosen Law Firm is a recognized leader in shareholder rights litigation, dedicated to helping shareholders recover losses and improve corporate governance. They have obtained over $1 billion for shareholders since their inception.

For more information, please visit Rosen Law Firm's website or contact them at 866-767-3653.

References:

[1] https://www.businesswire.com/news/home/20250723579650/en/Rosen-Law-Firm-Urges-Broadmark-Realty-Capital-Inc.-NYSE-BRMK-Stockholders-to-Contact-the-Firm-for-Information-About-Their-Rights
[2] https://www.morningstar.com/news/globe-newswire/9498657/investor-deadline-next-week-robbins-geller-rudman-dowd-llp-files-class-action-lawsuit-against-broadmark-realty-capital-inc-ready-capital-corporation-others-and-announces-opportunity-for-investors-with-substantial-losses-to-lead-class-action-lawsuit-brmk-rc
[3] https://www.globenewswire.com/news-release/2025/07/20/3118383/9788/en/BRMK-INVESTOR-ALERT-Bronstein-Gewirtz-Grossman-LLC-Announces-that-Broadmark-Realty-Capital-Inc-Investors-with-Substantial-Losses-Have-Opportunity-to-Lead-Class-Action-Lawsuit.html