Ready Capital Corporation Securities Lawsuits
Analysis based on 7 articles · First reported Mar 17, 2025 · Last updated Apr 25, 2025
The market is negatively impacted by the alleged misrepresentations from Flow Capital Corporation, leading to a significant drop in its stock price and raising concerns about transparency in the commercial real estate finance sector. This event could lead to increased scrutiny of other real estate finance firms' loan portfolios and disclosure practices.
Flow Capital Corporation, a New York-based real estate finance firm, is facing multiple securities class-action lawsuits, including Quinn v. Flow Capital Corporation and Goebel v. Flow Capital Corporation, filed in the United States — United States District Court for the Northern District of California. The lawsuits, led by Hagens Berman, allege that Flow Capital Corporation and its executives, including CEO Thomas E. Capasse, made false and misleading statements to investors between August 2024 and March 2025. Specifically, the complaints claim that Flow Capital Corporation downplayed the extent of trouble in its commercial real estate loan portfolio, failed to disclose significant non-performing loans, and did not accurately reflect these risks in its credit loss allowances. On March 3, 2025, Flow Capital Corporation announced a Q4 net loss of $1.80 per share and a full-year loss of $2.52 per share for 2024, attributing the downturn to a $284 million reserve for underperforming loans. The company also halved its quarterly dividend and reported a 16% reduction in book value. This news caused Flow Capital Corporation's shares to plummet nearly 27%, wiping out significant shareholder equity.
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