Pegasus, RCF Accused Of $1.5B Molycorp Pump-And-Dump

Law360, New York (February 22, 2012, 4:52 PM EST) -- Shareholders of rare earth oxide producer Molycorp Inc. on Tuesday launched a derivative suit accusing the company's board and private equity backers RCF Management LLC and Pegasus Capital Advisors LP of orchestrating a pump-and-dump scheme that netted more than $1.5 billion in ill-gotten gains for the alleged perpetrators.

Molycorp's board, led by representatives of majority stakeholders RCF and Pegasus, inflated the company's stock prices with false claims of rising demand for rare earth oxide, then sold off their shares for a hefty profit ahead of a...
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