Stockholder Sues CYS Investments, Two Harbors Over Allegedly Misleading Registration Statement

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CYS Investments, Inc. and its board of directors are facing a proposed class action lawsuit alleging violations of federal securities law. The case concerns a potential merger between CYS and co-defendant Two Harbors Investment Corp. through subsidiary defendant Eiger Merger Subsidiary LLC. The plaintiff alleges that the defendants filed a misleading registration statement in connection with the proposed transaction that omits information needed by stockholders to decide whether they support the deal.

Among the missing information, according to the complaint, was:

The plaintiff, a CYS stockholder, claims the proposed transaction undervalues the company and demands that the requested information be revealed in order for stockholders to be able to make informed decisions regarding the fairness of the deal. From the complaint:

This information is necessary to provide Company stockholders a complete and accurate picture of the sales process and its fairness. Without this information, stockholders were not fully informed as to the defendants’ actions, including those that may have been taken in bad faith, and cannot fairly assess the process.”