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Case Status:    DISMISSED    
On or around 06/02/2009 (Court's order of dismissal)

Filing Date: May 12, 2008

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.


Sector: Financial
Industry: Money Center Banks
Headquarters: Canada


Ticker Symbol: RY
Company Market: New York SE
Market Status: Public (Listed)

About the Company & Securities Data

"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: S.D. New York
DOCKET #: 08-CV-4431
JUDGE: Hon. William H. Pauley, III
DATE FILED: 05/12/2008
CLASS PERIOD END: 02/13/2008
  1. Girard Gibbs LLP (San Francisco)
  2. Seeger Weiss LLP (New York)
  3. Stueve Siegel Hanson LLP
No Document Title Filing Date
—Reference Complaint Complaint Related Data is not available
—Related District Court Filings Data is not available