On July 15, 2009, the US District Court for the Eastern District of Pennsylvania preliminarily approved a $32 million settlement of a subprime related securities class action against RAIT Financial Trust, RAIT's directors and officers, Grant Thornton, and Piper Jaffray.A copy of RAIT's 8-K filing announcing the settlement can be found here. A copy of the court's order giving preliminary approval to the settlement can be found here.
The plaintiffs alleged violations of Section 10(b) of the 1934 Securities Exchange Act and Section 11 of the Securities Act of 1933 for RAIT's: (1) failure to disclose its financial relationship with American Home Mortgage; and (ii) failure to adequately reserve for the loss in value of the securities worth approximately $95 million. The vast majority of the complaint had previously survived the defendants' motion to dismiss.
As reported, the entire settlement was funded by RAIT's D&O insurers. Neither Grant Thornton nor Piper Jaffray contributed to the settlement.