According to a law firm press release, on May 12, 2008 a class action lawsuit on behalf of persons who purchased Auction Rate Securities from RBC Dain Rauscher Inc., Royal Bank of Canada, and RBC Capital Markets Corporation between May 12, 2003 and February 13, 2008 (the “Class Period”), and who continued to hold such securities as of February 13, 2008. The class action is brought against Royal Bank of Canada and its wholly-owned subsidiaries, RBC Dain Rauscher Inc. and RBC Capital Markets Corporation. The Complaint alleges that RBC Dain Rauscher violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by deceiving investors about the investment characteristics of auction rate securities and the auction market in which these securities traded. Auction rate securities are either municipal or corporate debt securities or preferred stocks which pay interest at rates set at periodic “auctions.” Auction rate securities generally have long-term maturities or no maturity dates.

The Complaint alleges that, pursuant to uniform sales materials and top-down management directives, RBC Dain Rauscher offered and sold auction rate securities to the public as highly liquid cash-management vehicles and as suitable alternatives to money market mutual funds. According to the Complaint, holders of auction rate securities sold by RBC Dain Rauscher and other broker-dealers have been unable to liquidate their positions in these securities following the decision on February 13, 2008 of all major broker-dealers including RBC Dain Rauscher to “withdraw their support” for the periodic auctions at which the interest rates paid on auction rates securities are set.

The Complaint alleges that RBC Dain Rauscher failed to disclose the following material facts about the auction rate securities it sold to the class: (1) the auction rate securities were not cash alternatives, like money market funds, but were instead, complex, long-term financial instruments with 30 year maturity dates, or longer; (2) the auction rate securities were only liquid at the time of sale because RBC Dain Rauscher and other broker-dealers were artificially supporting and manipulating the auction rate market to maintain the appearance of liquidity and stability; (3) RBC Dain Rauscher and other broker-dealers routinely intervened in auctions for their own benefit, to set rates and prevent all-hold auctions and failed auctions; and (4) RBC Dain Rauscher continued to market auction rate securities as liquid investments after it had determined that it and other broker dealers were likely to withdraw their support for the periodic auctions and that a “freeze” of the market for auction rate securities would result.

If you bought Royal Bank of Canada securities and would like to obtain information about the Royal Bank of Canada lawsuit, then you are invited to call Kahn Gauthier Swick, LLC toll free at (866) 467-1400 to speak with an attorney or visit www.kgscounsel.com.