Welcome to the CytRx Corporation Securities Litigation Settlement Website

This website has been established to provide general information regarding the proposed Settlement of the consolidated action entitled In re CytRx Corporation ("CytRx") Securities Litigation, No. 2:14-CV-01956-GHK-PJW, pending before the United States District Court, Central District of California (the "Action"). The capitalized terms used on this website and not defined herein shall have the same meanings ascribed to them in the Stipulation of Settlement dated December 8, 2015, which can be found and downloaded by clicking on the Case Documents tab above. Your rights may be affected by the Settlement if you purchased or otherwise acquired the publically-traded securities of CytRx Corporation between November 20, 2013 and March 13, 2014, inclusive ("Class Period").

The case concerns claims brought by investors alleging that the price of CytRx securities were artificially inflated during the Class Period as a result of alleged false and misleading statements and omissions by the CytRx Defendants during the Class Period concerning, inter alia, the Company’s relationship with a stock promotion firm called DreamTeam.

Beginning on March 14, 2014, putative class action complaints were filed in the Court against CytRx and certain of the other Defendants. On June 13, 2014, the Court issued an order consolidating the related actions, appointing Deepak Gupta as Lead Plaintiff and approving his selection of Kahn Swick & Foti, LLC as Lead Counsel.

On October 1, 2014, Lead Plaintiff filed his Consolidated Class Action Complaint for Violation of Federal Securities Laws (“Consolidated Complaint”). Lead Plaintiff asserted claims against the Defendants pursuant to §§10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, and §§11, 15 and 12(b) of the Securities Act of 1933 (the “Securities Act”).  As to the Underwriters, the Consolidated Complaint only alleged claims under §§ 11 and 12(a)(2) of the Securities Act. On December 5, 2014 Defendants moved to dismiss the Consolidated Complaint. On July 13, 2015 the Court granted in part and denied in part the Consolidated Complaint and granted Lead Plaintiff leave to amend.

On August 7, 2015 Lead Plaintiff filed his First Amended Complaint for Violation of Federal Securities Laws (“FAC”) seeking to remedy the deficiencies the Court identified in its July 13, 2015 Order. On September 8, 2015 Defendants moved to dismiss the FAC.  The same day, Lead Plaintiff filed a motion for reconsideration regrading whether certain Defendants “made” statements under the federal securities laws. 

The case was settled during the pendency of Defendant’s motions to dismiss the FAC.  The Parties engaged in mediation efforts with the assistance of an experienced mediator, the Hon. Dickran M. Tevrizian (Ret.), including a formal mediation session and the submission of detailed mediation briefs. The Parties reached an agreement to settle the Action on December 8, 2015.

Lead Counsel has conducted an extensive investigation into the claims and the underlying events and transactions alleged in the Action. Lead Counsel has also researched the applicable law with respect to the claims of Lead Plaintiff and the Class against Defendants, as well as the potential defenses thereto. In addition, Lead Counsel has conducted informal discovery in connection with the proposed Settlement. Based upon the foregoing, Lead Counsel has concluded that the terms and conditions of this Stipulation are fair, reasonable and adequate to Lead Plaintiff and the Class, and in their best interests, and, accordingly, Lead Plaintiff has agreed to settle the claims raised in the Action pursuant to the terms and provisions of this Stipulation, after considering (i) the substantial benefits that Lead Plaintiff and the members of the Class will receive from resolution of the Action as against the Defendants, (ii) the attendant risks of litigation, and (iii) the desirability of permitting the Settlement to be consummated as provided by the terms of this Stipulation. Defendants have denied and continue to deny that they have committed any act or omission giving rise to any liability and/or violation of law. Nonetheless, Defendants are entering into this Settlement to eliminate the burden and expense of further litigation and the risk of not prevailing at trial and, therefore, have determined that it is desirable that the Action fully and finally be settled in the manner and upon the terms and conditions set forth in the Stipulation.

The Class consists of all persons and entities who purchased or otherwise acquired the publicly traded securities of CytRx between November 20, 2013 and March 13, 2014, inclusive.

Subject to Court approval and, as described more fully in the Notice, Lead Plaintiff, on behalf of himself and the Class, has agreed to settle all Settled Claims (as defined in ¶31 in the Notice) against Defendants and the other Released Parties in exchange for a settlement payment of $8.5 million in cash and stock (the “Settlement Amount”) to be deposited into an escrow account (the Settlement Amount, plus any interest earned thereon, is referred to in the Notice as the “Settlement Fund”). The Net Settlement Fund (the Settlement Fund less Taxes, Notice and Administration Costs, and attorneys’ fees and Litigation Expenses awarded by the Court) will be allocated among members of the Class in accordance with a plan of allocation that is approved by the Court. Estimated Administration costs are not anticipated to exceed $250,000.

Although the information in this website is intended to assist you, it does not replace the information contained in the Notice of Pendency and Proposed Settlement of Class Action, Motion for Attorneys' Fees and Litigation Expenses, and Settlement Fairness Hearing ("Notice") and Stipulation of Settlement, both of which can be found and downloaded by clicking on the Case Documents tab above. We recommend that you read the Notice and other relevant case documents carefully.

YOUR LEGAL RIGHTS AND OPTIONS IN THE SETTLEMENT