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Resource Capital settles commercial loans portfolio risk misrepresentation suit

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Resource Capital settles commercial loans portfolio risk misrepresentation suit

Resource Capital Corp. will pay $9.5 million to settle allegations that it materially misrepresented the risk of its commercial loans portfolio and controls for assessing the quality of its portfolio.

The complaint alleged that the company made false and misleading statements and engaged in a scheme to deceive the market and a course of conduct that artificially inflated the price of its common stock and operated as a fraud by materially misleading the investing public.

The complaint was filed in the United States District Court for the Southern District of New York on behalf of investors that bought Resource Capital's shares between March 2, 2015, and Aug. 4, 2015.

Consummation of the settlement is subject to various customary conditions that are not guaranteed to occur, including court approval.