Defendant Name: RBC Capital Markets, LLC

Defendant Type: Subsidiary of Public Company

Document Reference: 2008-246

Document Details

Legal Case Name SEC v. RBC Capital Markets Corporation
Document Name SEC Division of Enforcement Announces ARS Settlement in Principle With RBC Capital Markets Corp.
Document Date 08-Oct-2008
Document Format Civil Proceeding
Case Number 09-cv-05172
Allegation Type Broker Dealer
Document Summary The SEC "announced a preliminary settlement in principle with RBC Capital Markets Corp. (RBC) that would provide individual investors, small businesses, small nonprofits, charities and religious organizations the opportunity to sell back to RBC all of the auction rate securities (ARS) they purchased from RBC before the ARS market collapsed in February 2008."

Disgorgement & Penalty Information

Resolutions
Enjoinment
Compliance Related Independent Consultant
Offer to purchase at par ARS from certain affected investors; make whole losses sustained by certain affected investors (and offer non-recourse loans at no net cost to borrowers in the interim); participate in special arbitration process for consequential damages; use "best efforts to provide liquidity" to certain affected investors; notify investors

Related Documents:

comp21066-rbc 03-Jun-2009 Complaint
Complaint
In the Complaint, the SEC stated that: "This is a case in which RBC failed properly to disclose in communication with customers the increasing risks associated with auction rate securities ('ARS') that RBC underwrote, marketed and sold.... Through its employees and marketing materials, RBC misrepresented to many of its customers that ARS were safe, highly-liquid investments that were substitutes for cash or money-market funds. As a result, number customers invested funds in ARS through RBC that they needed or expected to have available on a short-term basis." The SEC alleged that: "During the fall of 2007 and early 2008, deteriorating market conditions and falling customer demand caused RBS, in order to prevent auction failures, to acquire much greater amounts of ARS in the auctions it managed, which in turn caused RBC's inventory of ARS to increase significantly. Consequently, during this time period, RBC considered declining to place bids for its own account at ARS auctions it managed and knew that the risk of failed auctions had materially increased. Despite RBC being aware of these material facts, RBC did not disclose them to customers."
court_doc2_09-cv-05172 09-Jun-2009 Court Docket Document
Judgment as to Defendant RBC Capital Markets Corporation
On June 4, 2009, Federal District Judge Loretta A. Preska entered final judgment against RBC Capital Markets Corporation pursuant to the consent of RBC Capital Markets Corporation.
LR-21585 30-Jun-2010 Litigation Release
SEC Completes Review of Performance by Citigroup, RBC and Wachovia Under Auction Rate Securities Settlements
On June 30, 2010, the SEC published a litigation release regarding this matter. The SEC announced that: "three financial firms that settled the Commission's auction rate securities (ARS) charges against them have satisfied their obligations under their respective settlements and that more than $26 billion has been returned to their ARS customers."

Other Defendants in Action:

RBC Capital Markets Corporation