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NYSE to Delist RCAP If Stock Price Doesn’t Improve

The New York Stock Exchange plans to delist RCS Capital (RCAP) common stock if the firm doesn’t get its stock price up, according to the firm. Companies listed on the exchange must keep their average closing price per share above $1 for 30 consecutive days, which RCAP hasn't been able to do. 

The company has six months to raise its stock price back to $1 a share, and RCAP will continue to trade on the exchange during the time. (As of 11:23 a.m. ET, RCAP was trading at $0.48 per share, up 17 percent from yesterday.)

“The Company intends to notify the NYSE that it anticipates that this deficiency will be cured and that it will return to compliance with the NYSE continued listing standard, and the NYSE has agreed to work with the Company through its initiatives,” RCAP said in a statement.

Separately, Massachusetts' top securities regulator on Thursday said he has charged Realty Capital Securities LLC, which is part of RCAP, with fraudulently casting shareholder proxy votes.

An administrative complaint filed by Massachusetts Secretary of the Commonwealth William Galvin seeks to revoke the broker-dealer registration of Realty Capital, an affiliate of American Realty Capital, according to a statement from Galvin's office. 

"RCS Capital is aware of the Massachusetts Securities Division's investigation and is fully cooperating with all relevant agencies," the company said, in a statement. "RCS Capital has received the complaint and is currently reviewing it."

RCAP, which runs a wholesale broker/dealer business and retail advice business, Cetera Financial, said it expects to post a net loss of $306.8 million for the third quarter, compared to a loss of $37 million in the year-ago quarter, according to a Securities and Exchange Commission filing. The firm anticipates a write-down of nearly $400 million for the first nine months of this year. The filing cited a significant and sustained decline in its market capitalization and a reduction in expectations for future growth and profitability as reasons for the losses.

During the last 12 months, RCAP's stock has dropped 96 percent. 

To shore up cash, RCAP recently sold its wholesale distribution business to Apollo Global Management for $6 million. The firm is also selling Hatteras, its liquid alternatives investment management platform, to the Hatteras Funds management group for $5.5 million and certain earn-out obligations. RCAP purchased Hatteras in the fall of 2013, under former chief Nicholas Schorsch.

The firm is also working with Lazard Freres & Co. to explore “options to raise significant capital and to rationalize the company’s capital structure,” RCAP said in a statement. The board of directors “will negotiate and approve any proposals derived from the process led by Lazard.”

(Reuters contributed to this story.)

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