8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): September 2, 2015

RAIT Financial Trust

(Exact name of registrant as specified in its charter)

Maryland	1-14760	23-2919819
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

2929 Arch St., 17th Floor, Philadelphia, Pennsylvania	19104
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (215) 243-9000

Not Applicable

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

The information set forth under Item 8.01 of this report is incorporated herein by reference.

Item 8.01 Other Events.

As we have previously disclosed, on September 16, 2014, Taberna Capital Management, LLC (“TCM”), a subsidiary of RAIT Financial Trust (“RAIT”), reached an agreement in principle with the staff of the Securities and Exchange Commission (“SEC”) to resolve a non-public investigation initiated by SEC staff. Consistent with this agreement in principle, the SEC accepted an offer of settlement submitted by TCM and entered an order (administrative proceeding file no. 3-16776) (the “Order”) on September 2, 2015. TCM consented to the entry of the Order without admitting or denying the findings therein. The Order, among other things, required TCM to pay disgorgement of $13.0 million, prejudgment interest of $2.0 million and a civil penalty of $6.5 million, aggregating to payments of $21.5 million. The aggregate amount of these payments was consistent with our prior disclosure regarding the agreement in principle referenced above. As previously disclosed, RAIT took a charge of $21.5 million relating to this settlement in 2014. In connection with TCM’s offer of settlement, RAIT provided a written commitment (the “Commitment”) to the SEC which became effective the date of the Order. The Commitment provided, among other things, that RAIT would ensure the payment by TCM of the $21.5 million of payments referenced above, which payments were made September 3, 2015. The above summary of the Commitment does not purport to be complete and is qualified in its entirety by the Commitment, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.1 and incorporated by reference herein.

The individuals named in the Order were one of the two former executive officers and the former employee of RAIT which RAIT previously disclosed had received “Wells Notices” from the SEC staff relating to the subject of such investigation. The former executive officer left RAIT as of December 31, 2014 and the former employee left RAIT in 2010. We have been informed that the SEC staff has notified the other former executive officer who received a Wells Notice that the staff has concluded its investigation as to such former executive officer and that it does not intend to recommend that the SEC commence any enforcement action against such former executive officer.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
10.1	Commitment by RAIT Financial Trust effective September 2, 2015.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	RAIT Financial Trust
September 4, 2015	By:	/s/ James J. Sebra
		Name:	James J. Sebra
		Title:	Chief Financial Officer and Treasurer

Exhibit Index

Exhibit No.	Description
10.1	Commitment by RAIT Financial Trust effective September 2, 2015.

EX-10.1

Exhibit 10.1

	Cira Centre
	2929 Arch Street, 17th Floor
	Philadelphia, PA 19104
	215.243.9000 | rait.com

August 4, 2015

In connection with the offer of settlement by Taberna Capital Management, LLC (“Taberna”) to the United States Securities and Exchange Commission (“Commission”) relating to the Commission’s investigation of Taberna,

I. RAIT Financial Trust (“RAIT”) commits:

A. To not, directly or through any company that is an affiliated person (as such term is defined in Section 2(a)(3)(C) of the Investment Company Act of 1940) (“affiliate”) of RAIT, seek or acquire any client relationship under which RAIT (or its affiliate) would act as an investment adviser, as defined in section 202(a)(11) of the Investment Advisers Act of 1940, for a period of three (3) years following the date of the Taberna Order (hereinafter the “Order”).

B. To ensure the payment by Taberna of disgorgement of $13,000,000, prejudgment interest of $2,000,000, and a civil penalty of $6,500,000 to the Securities and Exchange Commission.

C. Within ten (10) days of the entry of the Order, to post prominently on RAIT’s principal website a summary of the Order and hyperlink to the entire Order. RAIT shall maintain the hyperlink on its website for a period of twelve (12) months from the entry of the Order. Within thirty (30) days of the entry of the Order, RAIT shall provide a copy of the Order to each of Taberna’s existing advisory clients, if any, as of the entry of the Order via mail, e-mail, or such other method as may be acceptable to the Staff, together with a cover letter in a form not unacceptable to the Commission Staff.

D. Within thirty (30) days of the entry of the Order, to provide a copy of the Order to the current managers of the Taberna CDOs (to the extent known to RAIT), along with a cover letter requesting that the current managers provide notice to each Taberna CDO of the existence of the Order, and further requesting that the current managers post a hyperlink to the Order on any website maintained to communicate with investors in the Taberna CDOs.

E. To cooperate fully with the Commission in any and all investigations, litigations or other proceedings relating to or arising from the matters described in the Order. In connection with such cooperation, RAIT shall: (i) produce, without service of a notice or subpoena, any and all non-privileged documents and other information requested by the Staff subject to any restrictions under the law of any foreign jurisdiction; (ii) use its best efforts to cause its officers, employees, and directors to be interviewed by the Staff at such time as the Staff reasonably may direct; (iii)

provide any certification or authentication of business records of the company as may be reasonably requested by the Staff; and (iv) use its best efforts to cause its officers, employees, and directors to appear and testify without service of a notice or subpoena in such investigations, depositions, hearings or trials as may be requested by the Staff.

F. To certify, in writing every six (6) months from the date of the Order, and continuing for three years after the date of the Order, compliance with the commitment(s) set forth above. The certification shall identify the commitment(s) and provide written evidence of compliance in the form of a narrative. The Commission staff may make reasonable requests for further evidence of compliance, and RAIT agrees to provide such evidence. The certification and supporting material shall be submitted to Reid A. Muoio, Assistant Director in the Division of Enforcement (“Division”) (100 F St., NE, Washington, DC 20549) with a copy to the Office of Chief Counsel of the Enforcement Division (100 F St., NE, Washington, D 20549).

II. Taberna and RAIT hereby agree and acknowledge that the terms of the letter agreement dated November 4, 2014 (“Letter Agreement”), will remain in full force and effect following the entry of any settlement between Taberna and the Commission. The terms of the Letter Agreement shall remain operative until such time as the staff of the Enforcement Division (“Staff”) provides notice to Taberna and RAIT (directly or through counsel) that the Staff does not anticipate the institution of any additional enforcement actions arising out this matter. For the avoidance of doubt, Taberna and RAIT hereby further acknowledge that paragraph II serves only to memorialize the understanding of the parties at the time of the execution of the Letter Agreement.

RAIT FINANCIAL TRUST
By:	/s/ James J. Sebra
Name:	James J. Sebra
Title:	Chief Financial Officer and Treasurer

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