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
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
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.