Final Deadline Looms for Investors in Ready Capital Lawsuit: What’s at Stake?

Investors in Ready Capital Corporation (NYSE: RC) face a critical deadline as the law firm Faruqi & Faruqi, LLP continues its investigation into alleged securities fraud. With just weeks remaining until the May 5, 2025, cut-off for investors seeking to lead the class action lawsuit, the case underscores significant risks for shareholders who held the stock during the period from November 7, 2024, to March 2, 2025.

The Allegations Unfolded

The lawsuit alleges that Ready Capital and its executives misled investors by failing to disclose critical flaws in its commercial real estate (CRE) portfolio. Specifically, the complaint claims the company did not reveal that:
- Non-performing loans in its CRE portfolio were unlikely to be collected.
- The company would take a $284 million hit in combined CECL (current expected credit loss) and valuation allowances to “stabilize” these loans.
- These reserves were not properly reflected in its financial disclosures, leading to inflated statements about its financial health.

The truth came to light on March 3, 2025, when Ready Capital disclosed a net loss of $1.80 per share for the quarter and $2.52 annually, alongside a surge in leverage to 3.8x. This announcement triggered a 26.8% one-day drop in the stock price to $5.07, with heavy trading volume signaling panic among investors.

Market Impact and Investor Concerns

The lawsuit’s allegations hinge on whether Ready Capital’s leadership knew about the risks but omitted them to maintain an illusion of stability. The $284 million write-down alone represents nearly 60% of the company’s market capitalization at the time of disclosure, raising questions about the accuracy of prior earnings reports.

Investors who purchased shares between November 2024 and March 2025 may have suffered losses exceeding $50,000, qualifying them to seek compensation. The stock’s trajectory since the scandal offers a stark picture:

Legal Landscape and Class Action Dynamics

The May 5 deadline is not merely a procedural formality. It determines who can lead the lawsuit—a role reserved for the investor with the largest financial stake who can “adequately represent” the class. The lead plaintiff’s decisions will shape litigation strategy, settlement negotiations, and ultimate recovery.

Faruqi & Faruqi, which has recovered hundreds of millions for investors over decades, emphasizes that class members can either join the lead plaintiff effort or remain passive. However, failing to act before May 5 could mean losing the chance to influence the case’s outcome.

What Investors Should Do Next

• Calculate losses: Determine if your total losses during the class period exceed $50,000.
• Contact the firm: Reach out to Faruqi & Faruqi’s partner James (Josh) Wilson at 877-247-4292 or 212-983-9330 (Ext. 1310) to discuss legal options.
• Act swiftly: The deadline is irrevocable, and delays could forfeit eligibility for recovery.

Conclusion: The High Stakes of Silence

Ready Capital’s case exemplifies how corporate transparency failures can crater investor confidence—and shareholder value. The $284 million write-down, the 26.8% stock plunge, and the revelation of undisclosed risks all point to a breach of fiduciary duty.

For investors, the May 5 deadline is a pivotal moment. Those who held shares during the class period stand to recover losses only if they act promptly. The legal outcome could also set a precedent for how companies disclose CRE portfolio risks, particularly in volatile real estate markets.

As the clock ticks toward May 5, the message is clear: inaction could mean accepting a loss—or worse, enabling a repeat of such missteps. The ball is now firmly in investors’ court.

This analysis is for informational purposes only and does not constitute legal or investment advice.