GRABAR LAW OFFICE INVESTIGATES POTENTIAL SHAREHOLDER ACTION ON BEHALF OF CURRENT SHAREHOLDERS OF RENOVACARE, INC. (OTC: RCAR)
On May 28, 2021, the SEC issued a press release stating it had charged RenovaCare with securities fraud. The SEC filed a civil lawsuit against RenovaCare and its chairman and controlling shareholder, Harmel S. Rayat, in which the SEC alleged that RenovaCare and Rayat assisted in developing promotional materials, which included false and misleading statements designed to increase the company’s stock price, and paid for those materials through intermediaries to conceal the source of funds. The promotional materials ran between October 2017 and at least January 2018 and were correlated with a sharp rise in the price of RenovaCare stock. According to the complaint, in January 2018, OTC Markets Group, Inc. requested RenovaCare issue a press release to explain its relationship to the promotion. The complaint alleges that Rayat and RenovaCare then drafted and issued a press release and a Form 8-K that contained material misrepresentations and omissions denying Rayat's and the company's involvement in the promotion. The SEC's complaint charges Rayat and RenovaCare with violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and also charges Rayat with aiding and abetting the company's violations of those provisions, among other things.
Additional Information
Unlike a class action, brought on behalf of damaged investors, a shareholder derivative action is an action brought by a shareholder of a public company on behalf of and for the benefit of the company itself against the directors and/or officers of that company. In a derivative action, shareholders “step into the shoes” of the directors and officers of a company and bring litigation that the board would be unwilling to pursue on its own.
RenovaCare shareholders who have held shares of the Company’s stock since August 14, 2017, can seek corporate reforms, the return of funds back to company coffers and potentially a court approved incentive award if appropriate.
If you would like to learn more about this matter at no cost to you, please fill out the form provided or contact us at jgrabar@grabarlaw.com or call 267-507-6085. $RCAR
Standard Derivative Form Retainer
Standard Form Derivative Retainer Letter - No Cost
A securities class action is a case brought pursuant to Federal Rule of Civil Procedure 23 on behalf of a group of persons and entities who purchased the securities of a particular company during a specified period of wrongdoing (the class period). The complaint generally contains allegations that the company and/or certain of its officers and directors violated one or more federal or state securities laws.
A shareholder derivative action is a lawsuit brought by a shareholder of a publicly traded company on behalf of and for the benefit of the company itself against the directors and/or officers of that company. In a derivative action, shareholders “step into the shoes” of the directors and officers of a company and bring litigation that the corporate board would be unwilling to pursue on its own. Such unwillingness typically relates to the fact that the board members themselves are alleged to have participated in the misconduct and thus would be unlikely to “sue themselves.”
Shareholder derivative litigation can recover money damages back to the company for financial or reputational harm caused by the conduct of its insiders, and also can be used to improve the governance of public companies in order to guard against such harms in the future.
Any shareholder of a company can be a nominal plaintiff in a shareholder derivative action provided that the shareholder has held stock in the company continuously from at least the period in which the alleged wrongful conduct began through the present.