(HedgeCo.Net) The Securities and Exchange Commission today announced that RBC Capital Markets LLC has agreed to a $2.5 million settlement for causing materially false and misleading disclosures about its valuation analysis in a proxy statement for Rural\/Metro Corporation\u2019s sale in 2011 to a private equity firm. <\/p>\n
RBC was the lead financial adviser to Rural\/Metro, a medical transportation services provider, and received a $500,000 fee for a fairness opinion presented to Rural\/Metro\u2019s board as it considered the sale. An SEC investigation found that RBC\u2019s presentation contained materially false and misleading statements which made the bid look more attractive, and caused that information to be included in the proxy statement Rural\/Metro filed in May 2011 to solicit shareholder approval for the sale.<\/p>\n
The SEC found that RBC\u2019s presentation described one of its valuations as being based on Wall Street analysts\u2019 \u201cconsensus projections\u201d of Rural\/Metro\u2019s 2010 adjusted EBITDA, a pretax earnings figure. In fact, the valuation did not reflect analysts\u2019 research or a \u201cconsensus\u201d view, but was Rural\/Metro\u2019s actual 2010 adjusted EBITDA of $69.8 million. Rural\/Metro\u2019s proxy statement included a summary of RBC\u2019s valuation analysis, which falsely stated that RBC used \u201cWall Street research analyst consensus projections\u201d for 2010 \u201cconsensus\u201d adjusted EBITDA. The SEC order found that in addition to being false, the proxy statement was misleading because shareholders would be led to believe the analysis reflected the \u201cconsensus\u201d calculation of $76.8 million. The SEC also found that RBC caused the proxy statement to include a misleading disclosure that suggested RBC had relied on another valuation analysis in its fairness presentation to Rural\/Metro\u2019s board when, in fact, RBC did not rely on the analysis for valuation purposes.<\/p>\n
\u201cAccurate disclosures about financial advisers\u2019 fairness opinions are important to shareholders in the sale of a corporation,\u201d said Andrew J. Ceresney, Director of the SEC Enforcement Division. \u201cThis enforcement action holds RBC accountable for causing its client to distribute material misstatements about its financial analysis to shareholders.\u201d <\/p>\n
Without admitting or denying the findings, RBC agreed to the entry of an SEC order that it caused Rural\/Metro to violate Exchange Act Section 14(a) and Exchange Act Rule 14a-9, which prohibits solicitation by means of a proxy statement that contains any materially false or misleading statement. RBC agreed to cease and desist from committing or causing further violations and to pay $500,000 in disgorgement, $77,759 in interest, and a $2 million penalty.<\/p>\n","protected":false},"excerpt":{"rendered":"
(HedgeCo.Net) The Securities and Exchange Commission today announced that RBC Capital Markets LLC has agreed to a $2.5 million settlement for causing materially false and misleading disclosures about its valuation analysis in a proxy statement for Rural\/Metro Corporation\u2019s sale in […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12,16034,919,16,3,16048,16047],"tags":[],"class_list":["post-54168","post","type-post","status-publish","format-standard","hentry","category-hedge-fund-regulation","category-hedge-fund-rulings","category-hedge-fund-research","category-hedgeco-networks-press-releases","category-hedgeco-news","category-hedgecovest-news","category-insider-trading-2"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/54168","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=54168"}],"version-history":[{"count":3,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/54168\/revisions"}],"predecessor-version":[{"id":54171,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/54168\/revisions\/54171"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=54168"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=54168"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=54168"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}