Ready Capital Investors Face Crucial Deadline as Class Action Lawsuit Proceeds

Investors who held shares in Ready Capital Corporation (NYSE: RC) during late 2024 and early 2025 are now faced with a critical decision: act swiftly to join a class action lawsuit or risk losing their chance to seek compensation for alleged financial misconduct. The case, led by law firms including Pomerantz, Robbins Geller, and others, accuses Ready Capital of misleading investors about the health of its commercial real estate (CRE) portfolio, culminating in a dramatic stock collapse earlier this year.

The Allegations: Hidden Risks and Misleading Statements

The lawsuit, Quinn v. Ready Capital Corporation, alleges that the company and its executives violated the Securities Exchange Act of 1934 by concealing critical financial risks. Central to the claims is Ready Capital’s handling of non-performing loans in its CRE portfolio. According to the complaint, the company failed to disclose that:
1. Non-Performing Loans Were Unlikely to Be Collected: Significant CRE loans were deemed uncollectible, yet the company did not disclose this until late.
2. Reserves Were Understated: A $284 million reserve—taken to “stabilize” the portfolio—was not accurately reflected in its financial statements, leading to inflated earnings reports.
3. Financial Decline Was Imminent: The misstatements allegedly caused the stock to trade at artificially high levels until March 2025, when the truth emerged.

On March 3, 2025, Ready Capital revealed a fourth-quarter net loss of $1.80 per share and a full-year loss of $2.52 per share, citing the $284 million charge for non-performing loans. This disclosure caused the stock to plummet 27% in a single day, dropping from $6.93 to $5.07.

The Legal Landscape: Key Players and Deadlines

Multiple law firms are actively representing investors in this case, each emphasizing their track record in securities fraud litigation. Pomerantz, Robbins Geller, and others have sent out notices urging affected investors to file lead plaintiff motions by May 5, 2025.

• Pomerantz Law Firm: Filed its own complaint in April 2025, highlighting the alleged mismanagement and the sudden stock decline. The firm invites investors to contact them at newaction@pomlaw.com or toll-free at 888.4-POMLAW.
• Robbins Geller: Emphasized its $2.5 billion in recoveries for investors in 2024, including a historic $7.2 billion Enron settlement. Contact: info@rgrdlaw.com or 800/449-4900.
• Levi & Korsinsky: Stresses its role in recovering hundreds of millions for shareholders, with a focus on the “severe” drop in Ready Capital’s stock.

Why the Deadline Matters

The May 5 deadline is not merely procedural. Investors seeking lead plaintiff status must demonstrate they have the largest financial stake and can adequately represent the class. However, even those who do not become lead plaintiffs may still recover damages if the case succeeds—no upfront costs are required as the litigation proceeds on a contingency fee basis.

What’s at Stake for Investors?

The lawsuit underscores the risks of corporate opacity in real estate lending. Ready Capital’s sudden write-downs and stock collapse mirror broader industry pressures, including rising interest rates and CRE market instability. For investors, the case could set a precedent for holding companies accountable for undisclosed financial vulnerabilities.

Conclusion: Act Now or Risk Missing Out

With the stock down nearly 30% since the allegations surfaced, the urgency for investors to act is clear. The May 5 deadline is a hard stop for lead plaintiff motions, and affected investors must move quickly to retain counsel or submit claims. While the outcome of the case remains uncertain, the sheer size of Ready Capital’s financial missteps—$284 million in reserves, a 27% stock plunge—suggests significant potential recoveries.

Investors who held RC shares between November 7, 2024, and March 2, 2025, are encouraged to consult the law firms listed above to explore their options. The clock is ticking, and with millions at stake, there’s little room for delay.

This article is for informational purposes only and should not be considered legal or financial advice. Always consult a professional before making investment decisions.