Royal Bank of Canada : Auction Rate Securities

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Royal Bank of Canada : Auction Rate Securities Summary: The class action lawsuit was filed on behalf of persons who purchased Auction Rate Securities from RBC Dain Rauscher Inc., Royal Bank of Canada, and RBC Capital Markets Corporation between May 12, 2003 and February 13, 2008 (the “Class Period”), and who continued to hold such securities as of February 13, 2008. The class action is brought against Royal Bank of Canada and its wholly-owned subsidiaries, RBC Dain Rauscher Inc. and RBC Capital Markets Corporation. The Complaint alleges that RBC Dain Rauscher violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by deceiving investors about the investment characteristics of auction rate securities and the auction market in which these securities traded. Auction rate securities are either municipal or corporate debt securities or preferred stocks which pay interest at rates set at periodic “auctions.” Auction rate securities generally have long-term maturities or no maturity dates.

The Complaint alleges that, pursuant to uniform sales materials and top-down management directives, RBC Dain Rauscher offered and sold auction rate securities to the public as highly liquid cash-management vehicles and as suitable alternatives to money market mutual funds. According to the Complaint, holders of auction rate securities sold by RBC Dain Rauscher and other broker-dealers have been unable to liquidate their positions in these securities following the decision on February 13, 2008 of all major broker-dealers including RBC Dain Rauscher to “withdraw their support” for the periodic auctions at which the interest rates paid on auction rates securities are set.

The Complaint alleges that RBC Dain Rauscher failed to disclose the following material facts about the auction rate securities it sold to the class: (1) the auction rate securities were not cash alternatives, like money market funds, but were instead, complex, long-term financial instruments with 30 year maturity dates, or longer; (2) the auction rate securities were only liquid at the time of sale because RBC Dain Rauscher and other broker-dealers were artificially supporting and manipulating the auction rate market to maintain the appearance of liquidity and stability; (3) RBC Dain Rauscher and other broker-dealers routinely intervened in auctions for their own benefit, to set rates and prevent all-hold auctions and failed auctions; and (4) RBC Dain Rauscher continued to market auction rate securities as liquid investments after it had determined that it and other broker dealers were likely to withdraw their support for the periodic auctions and that a “freeze” of the market for auction rate securities would result.

On October 16, 2008, the Court entered the Order signed by Judge William H. Pauley, III. According to the Order, because no other member of the proposed class has moved to appointed as lead plaintiff, Eugene F. Brigham, who has the largest financial interest in the relief sought, is appointed lead plaintiff. On November 11, 2008, the law firm Girard Gibbs LLP was appointed to serve as Lead Counsel.

On June 2, 2009, the Court entered the Order signed by Judge William H. Pauley, III. According to the Order, the Lead Plaintiff's request for voluntary dismissal without prejudice pursuant to Federal Rule of Civil Procedure 41(a)(2) is hereby granted.

INDUSTRY CLASSIFICATION:
SIC Code: 6029
Sector: Financial
Industry: Money Center Banks

COMPANY/ISSUER NAME:	Royal Bank of Canada
COMPANY/ISSUER TICKER:	RY
COMPANY WEBSITE:	http://www.royalbank.com/

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

Eugene F. Brigham, et al. v. Royal Bank of Canada, et al.

COURT: S.D. New York	DOCKET NUMBER: 08-CV-4431
JUDGE NAME: Hon. William H. Pauley, III
DATE FILED: 05/12/2008	SOURCE: Notice of Filing
CLASS PERIOD START: 05/12/2003	CLASS PERIOD END: 02/13/2008
TYPE OF COMPLAINT: Complaint (Unamended and Unconsolidated)
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Girard Gibbs LLP (San Francisco) 601 California Street, Suite 1400, San Francisco, CA, 94108 (voice) 415.981.4800, (fax) 415.981.4846, mail@girardgibbs.com Seeger Weiss LLP (New York) One William Street, New York, NY, 10004 (voice) 212.584.0700, (fax) , info@seegerweiss.com Stueve Siegel Hanson LLP 460 Nichols Road, Suite 200, Kansas City, MI, 64112 (voice) 816.714.7100, (fax) 816.714.7101, info@stuevesiegel.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 3

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Class Action Complaint For Violations Of Federal Securities Laws - Jury Trial Demanded
Type: Complaint		Date on the document: 5/12/2008
Order
Type: Order Appointing LP/LC		Date on the document: 10/16/2008
Order Appointing Eugene F. Brigham As Lead Plaintiff And Approving Lead Plaintiff's Selection Of Counsel
Type: Order Appointing LP/LC		Date on the document: 11/11/2008
Order Granting Request For Voluntary Dismissal Of Action Pursuant To Fed. R. Civ. P. 41(a)(2)
Type: Order		Date on the document: 06/02/2009
U.S. District Court Civil Docket
Type: Docket		Date on the document: 06/02/2009

OTHER DOCUMENTS

Case Name and/or Number:
Type:		Date on the document:

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