San Diego, Sept. 2, 2011 (Shareholders Foundation) -- An investor in Crexus Investment Corp (NYSE:CXS) shares filed a lawsuit against certain directors and officers of Crexus Investment Corporation over alleged breaches of fiduciary duties.
According to the complaint the plaintiff alleges that certain directors and officers of Crexus Investment Corporation breached their fiduciary duties owed to NYSE:CXS stockholders. Specifically the plaintiff alleges that Annaly Capital Management, Inc. ( Annaly ) controls Crexus Investment Corp. through its ownership stake in Crexus Investment Corp. and through its subsidiary Fixed Income Advisory Company ( FIDAC ), which entered into a management agreement with CreXus Investment Corporation. The complaint alleges that Annaly, aided and abetted by the defendants, executed a scheme to substantially increase the benefits and fees it derives from its control of Crexus Investment by causing the Company to engage in the acquisition of a portfolio of high-risk assets financed through a highly dilutive stock offering.

Crexus Investment Corp reported an increase in its annual Total Revenue from $0.33million in 2009 to $20.73million in 2010 and its reported that its Net Income rose from a Net Loss of $1.01million in 09 to a Net Income of $11.89million in 2010. In addition Crexus Investment reported that its second quarter Revenue rose from $4.84million last year to $12.90million this year and its second quarter Net Income surged from $2.39million one year earlier to $22.12million for the second quarter in 2011.

Shares of Crexus Investment Corp (Public, NYSE:CXS) traded during September 2009 as high as $14.90 and during the first months in 2011 as high as $13.36.

Then on March 28, 2011 CreXus Investment Corp. (NYSE:CXS) announced that it has priced an underwritten public offering of 50 million shares of common stock at $11.50 per share for estimated gross proceeds of approximately $575 million. The same day, Starwood Property Trust, Inc. announced that it has made an unconditional offer to acquire all of the outstanding shares of common stock of CreXus Investment Corp. (NYSE: CXS) for $14.00 per share.
In the following NYSE CXS shares declined to $10.89 on April 11 and $10.26 on June 15, 2011.

The plaintiff further alleges that CreXus Investment Corp rejected the unsolicited merger proposal from Starwood Property Trust in favor of the dilutive stock offering which netted CreXus Investment Corp $10.8675 per share.

NYSE CXS shares fell in August under $10 per share and closed on September 2, 2011 at $9 per share.