WASHINGTON (Legal Newsline) — RBC Capital Markets LLC will pay $2.5 million after allegations of false and misleading statements during a valuation analysis, the Securities and Exchange Commission (SEC) has announced.
As the lead financial adviser to Rural/Metro Corporation, RBC was paid to provide a fairness opinion to the Rural/Metro board during its sale in 2011 to a private equity firm. According to the SEC, RBC’s presentation contained materially false and misleading statements that made the bid look more attractive. The alleged false information was included in the proxy statement Rural/Metro filed in May 2011 to solicit shareholder approval for the sale.
“Accurate disclosures about financial advisers’ fairness opinions are important to shareholders in the sale of a corporation,” said Andrew J. Ceresney, director of the SEC Enforcement Division. “This enforcement action holds RBC accountable for causing its client to distribute material misstatements about its financial analysis to shareholders.”
RBC neither admitted to nor denied the findings, but agreed to the SEC order forcing it to disgorge the $500,000 it was paid for its services plus $77,759 in interest, and pay a $2 million penalty.
George Parizek, Brittany Hamelers and Amanda de Roo handled the case for the SEC, assisted by trial counsel Fred Block and supervised by Timothy England.