The fate of Nicholas Schorsch’s companies holds lessons for brokers who buy stock in their employers’ firms.
For advisers and executives who owned shares of RCAP, the defunct, mammoth brokerage firm formerly controlled by Nicholas Schorsch, a painful financial chapter of their lives ended last month.
A federal judge in New York approved the settlement of a class action lawsuit filed by investors almost three years ago who bought stock in Mr. Schorsch’s former brokerage, RCS Capital Corp. The complaint was filed in December 2014 in U.S. district court for the southern district of New York against the company and former executives, including Mr. Schorsch. The lead plaintiffs were Oklahoma Police Pension Fund and Retirement System and City of Providence, R.I.
RCAP filed for bankruptcy early last year. The value of the company stock was wiped out.