December 19, 2014
According to a recently filed lawsuit against Nicholas Schorsch by Lisa P. McAlister, ex-chief accounting officer, Schorsch ordered subordinates to manipulate financial results of his firm American Realty Capital Properties (ARCP) and tried to pin the blame on her.
The Wall Street Journal reports that McAlister alleges Schorsch instructed her and former CFO Brian Block to shift numbers to cover up errors and that she repeatedly expressed concerns about the directive, including an email to Grant Thornton, the real estate investment trusts auditor, but that her concerns were ignored.
Her suit is against Schorsch, American Realty Capital Properties and David S. Kay, , who suceeded Schorsch as CEO in September and alleges damages of $50 million for defamation.
In late October, ARCP disclosed that there were errors in the first quarter accounting and that they had intentionally concealed the error in the second quarter report. Earlier this week the company announced that Schorsch had resigned from the ARCP board of directors.
Since mid December Schorsch has resigned from boards of more than 10 companies related to Cole Capital Advisors and ARCP related companies. Schorsch companies and affiliates have sponsored and/or sold a number of nontraded REITs, including the following:
- American Realty Capital-Retail Centers of America II
- American Realty Capital Daily Net Asset Value Trust
- American Realty Capital Global Trust II
- American Realty Capital Healthcare III
- American Realty Capital Hospitality Tr
- American Realty Capital NYC REIT
- ARC Realty Finance Trust
- ARC III
- ARC IV
- Business Development Corp of America
- Business Development Corp of America II
- Cole Credit Property Trust
- Cole Office and Industrial REIT
- Cole Real Estate Income Strategy
Nontraded REITs sponsored by American Realty Capital Properties were widely sold by financial advisers like LPL Financial, Cetera Financial Group and First Allied. If you have suffered damages as a result of investments made into nontraded REITs contact us to learn about your recovery options.
Rex Securities Law , located in Boca Raton, FL, provides representation to investors nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.
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