Vereit Inc (fka VER)

[lucky, mydog]

https://www.sec.gov/litigation/admin/2020/33-10793.pdf

[ap17]

1BB settlement.
https://www.investmentnews.com/article/20191007/FREE/191009943/arcp-class-action-investors-get-50-cents-on-the-dollar-attorneys

[Renee]

ARCP: Former Reit Manager and Executives to Settle SEC Charges for More Than $60 Million

SEC Litigation:

https://www.sec.gov/litigation/litreleases/2019/lr24537.htm

[ibetrading]

This jump has been way over due. This is beyond under valued.now if we can just get the dividend back.

[Wildbilly]

My options expired worthless, nice work

staying with ARCP, you've earned your divies (ears)

did I ever mention options hate me?

[Spicknspan]

Things are looking better in ARCP. Nice dividend and up 10% since the end of last year.

[Spicknspan]

Looks like that gap may get filled.

[Wildbilly]

Hi, with your horizon as long as

the IYR doesn't dip below 74.14 things look good for you from a chart perspective

I bought the Jan 17 $10 Cs early wed. a:m based purely on unusual option activity the day before. That option activity has dried up, but as long as the underlying vol. picks up when the crowds start coming back next week I think I'm ok, the pps is cooperating.

I'm a little concerned about that gap we just left behind, but you have a nice one to look forward to from Oct.

up - 12-30-14 - 8.57 to 8.91

down- 10-29-14 - 12.34 to 10.24



Should be an interseting year ahead, good luck.




.

[Spicknspan]

The yield is too good to pass up with interest rates so low. I bought in before the bomb dropped--and after the bomb dropped.
Bomb= disclosure of false financial reporting.

And a new year means no one selling for reasons such as reducing their tax bill.

[Wildbilly]

American Realty Capital (ARCP) Stock Surges Today
on Corvex Management Stake - TheStreet

http://www.thestreet.com/story/12996629/1/american-realty-capital-arcp-stock-surges-today-on-corvex-management-stake.html



.

[TheFinalCD]

http://seekingalpha.com/news/2196265-american-realty-minus-7-percent-as-accounting-fallout-continues ARCP

[Spicknspan]

So much negativity. Time to but

[ClayTrader]

* * $ARCP Video Chart 12-18-14 * *

Link to Video - click here to watch the technical chart video

[Atlanta1]

$ARCP - in at $7.73

fingers crossed

[EMPATHY]

ShOrTiEs in charge now!Elevator2hell-l-l-l-ll-!!

No buying till the smoke clears!

http://shortsqueeze.com/?symbol=arcp&submit=Short+Quote%99

[CAretiree]

Actually I thought the CEO's leaving was good news.

[DoughRay]

Today's news explains blocks being dumped at close last week. Fricken insiders. More lawsuits.

[DoughRay]

1/2 mill blocks (couldn't confirm the second) went thru Fri close. Hedge fund thinks yields won't suffer.

[CAretiree]

Interesting that the stock is going up since TheStreet.com posted a sell recommendation this morning.

http://www.thestreet.com/story/12967593/1/american-realty-capital-property-arcp-downgraded-from-hold-to-sell.html?puc=yahoo&cm_ven=YAHOO

[papabb]

Run baby run!

[oxnous]

The brokerages are coming back and starting to sell their non-traded REIITS again. Good news.

Schorsch really has gotten a big head.

[oxnous]

Hope springs eternal.

High risk--high potential reward.

[ulfahl]

...and yet $ARCP defies gravity, lol

[hoggydog]

Do you know if the ex-dividend date was changed? I read somewhere yesterday that it had been.

[DoughRay]

Target hit. GL

[conix]

Does American Realty Capital Properties Have More Explaining To Do?

The adage "where there is smoke there is fire" once more becomes a self-fulfilling prophecy as the FBI reportedly joins the SEC in investigating American Realty Capital Properties Inc's (NASDAQ: ARCP) accounting irregularities that were made public last week.
Adding Fuel To The Fire

Premarket on Monday, November 3, American Realty confirmed in a PR release:

"In the middle of the night, we received a letter from RCS Capital Corp (NYSE: RCAP) the equity purchase agreement, dated September 30, 2014, between RCS and an affiliate of ARCP. As we informed RCS orally and in writing over the weekend, RCS has no right and there is absolutely no basis for RCS to terminate the agreement. Therefore, RCS's attempt to terminate the agreement constitutes a breach of the agreement. In addition, we believe that RCS's unilateral public announcement is a violation of its agreement with ARCP."



Investors can file this under "nothing is so bad that it can't get worse" for American Realty shareholders and employees of ARCP's Cole Capital non-traded REIT and investor advisory business unit.
ARCP's Recent History Filled With Controversy

A Benzinga article dated October 3 details a brief chronology of the controversial events that led up to the sudden announcement on October 1 of the sale of Cole Capital Advisors to the Nick Schorsch-led RCS Capital.

It is interesting to note that when the Cole Capital deal was announced, shares of RCS traded higher, and shares of American Realty traded lower on the news. The fact that RCS Capital is unilaterally terminating the arrangements speaks volumes regarding American Realty's ability to conduct business as usual moving forward.
No Third Party Bids For Cole Capital

The Cole Capital sale was a negotiated deal between the management of two Schorsch-led companies. There were no third party or arm's length bids for Cole Capital to confirm the valuation of this complicated business.

The immediate resignations and replacement of both the American Realty Chief Financial Officer and Chief Accounting Officer was announced last week in conjunction with the American Realty accounting irregularities and statement of non-reliance on past financial statements.

Any valuation utilizing financial modeling or projections would have at least partially relied upon financial statements that were prepared by the former American Realty CFO and CAO.
Two Hats?

In the terse release on November 3, the RCS Capital board announced that "it has terminated the previously disclosed definitive agreement to acquire Cole Capital Partners, LLC and Cole Capital Advisors, Inc. (together, "Cole Capital") from American Realty Capital Properties, Inc."

The formerly amicable relationship between these two Schorsch-led companies has now turned adversarial after Schorsch's initial attempt to "cut the Cole Capital baby in half" has failed.
Can Cole Capital Remain Vibrant & Viable?

One of the logical reasons to support the concept of a negotiated sale of Cole Capital to RCS Capital might be that if it were to become common knowledge that Cole was "being shopped" on Wall Street, it might have caused an exodus of valuable talent.

Now that the prior American Realty 2014 financial statements are under investigation and review, this will likely cause a sharp falloff in the ability of Cole to raise money for its non-traded REIT business.

Under these circumstances, key employees and other parties with agreements in place may attempt to cut ties with Cole because of the ongoing investigations and issues that have already come to light.
Crises Of Confidence

If Wall Street now discounts the value of Cole Capital, it will reduce American Realty's net asset value and future share price targets.

It remains to be seen how long it will take the company to recover from this series of devastating events. Given the high stakes involved, both boards and management teams must attempt to regain the confidence of shareholders and capital markets in order to conduct business.

Article: http://finance.yahoo.com/news/does-american-realty-capital-properties-204303845.html

[oxnous]

Hope they keep the dividend the same. The yield is great right now, but I have been in these high yielding REITS before and if they cut the dividend, it can hurt.

[DoughRay]

Out first resistance.

[penny_mastery]

Got another chunk of shares at 7.80

[conix]

LPL, AIG Advisor Group broker-dealer network putting the brakes on sales of Schorsch-linked nontraded REITs

After accounting error at ARCP found, 10% of registered reps who could sell real estate maven's products on hold


Nov 4, 2014 @ 8:42 am

By Bruce Kelly


Two major independent broker-dealers, LPL Financial Holdings and the AIG Advisor Group network, have cut ties, at least for now, with REITs associated with Nicholas Schorsch, the embattled chairman of a sprawling real estate investment empire.

LPL, the largest independent U.S. broker-dealer with nearly 14,000 advisers, said Tuesday it would no longer sell products by American Realty Capital Properties Inc. and RCS Capital Corporation “and their respective affiliates.”

AIG Advisor Group, with four broker-dealers that house 6,000 registered representatives and advisers, told its sales force Monday that it was suspending sales of two nontraded real estate investment trusts, the American Realty Capital New York City REIT Inc. and the Phillips Edison-ARC Grocery Center REIT II.




With the loss of access to AIG Advisor Group reps, Mr. Schorsch has so far said good-bye for now to almost 11,700 registered reps who potentially would sell his products. That accounts for roughly 10% of the registered reps who are counted as advisers at independent-contractor broker-dealers

Realty Capital Securities is the wholesaling broker-dealer for both REITs. Mr. Schorsch is the executive chairman of that company's parent, RCS Capital Securities Corp.

(Related: Two Schorsch companies at odds over $700M deal)

A spokeswoman for AIG, Linda Malamut, confirmed that the AIG Advisor Group had temporarily halted the sale of two Schorsch nontraded REITs. When asked to explain why, Ms. Malamut said: “We have no further comment at this time.”

“RCAP has strong relationships with our broker-dealers and we are working closely with those who have requested clarity on recent events,” Andy Backman, a spokesman for the company, said in an email. “Based upon our discussions, it is evident that broker-dealers understand the value of RCS distributed products and are eager to work aggressively with us to resolve any outstanding questions.”

AIG's move comes as Mr. Schorsch faces withering scrutiny after news broke last Wednesday that the traded REIT he controls, American Realty Capital Properties Inc., had made a $23 million accounting error that resulted in the firing of its chief financial officer.

AIG Advisor Group is the latest broker-dealer network to halt sales of Schorsch REITs.

Securities America Inc., with 1,772 registered reps and advisers, confirmed Friday it had temporarily suspended sales of two American Realty Capital-related REITs: the Phillips Edison-ARC Grocery Center REIT II and Cole Capital Properties V.

Also last week, the four broker-dealers in the National Planning Holdings Inc. broker-dealer network informed its 3,954 registered reps and advisers that it was “temporarily suspending nontraded REITs sponsored or distributed by [American Realty Capital] and its affiliated companies.”

[ulfahl]

$ARCP doing nicely so far, love it when the market overreacts. :)

[conix]

American Realty Capital Falls After RCS Drops Cole Purchase

Bloomberg

American Realty Capital Properties, Inc. extended a share plunge after the sale of its Cole Capital private-capital management unit was terminated amid an FBI investigation into accounting errors announced last week.

Securities America Halts Sales of ARC Nontraded REIT

InvestmentNews

Securities America, Inc., with 1,772 registered reps and advisers, confirmed Friday it had temporarily suspended sales of two American Realty Capital-related REITs: the Phillips Edison-ARC Grocery Center REIT II and Cole Capital Properties V, one day after another large independent broker-dealer made a similar move.

[kpisme]

I wish I would have caught that 7.38 dip. I would be looking good.

[EMPATHY]

Down she goes!Warp factor 5!

ARCP's gonna need a serious tractor beam to get this out of the black hole!

[DoughRay]

CC action.

[DoughRay]

Great MM sideshow. Loving these pulls. GL

[UpTickMeA$AP]

Money is being made right now. Kettles black... Gltu




Glta

[kpisme]

Yes there are no more men left in the market only scared babies.

Long and strong.

THIS WILL PASS and money is to be MADE.

[UpTickMeA$AP]

Wishful thinking .. Timber! ARCP going down down down.

[kpisme]

8.50 max followed by a rise to 9.14, really who knows?

[Wanka]

How far is this dropping tomorrow?

[Enterprising Investor]

Former CFO Block needs to raise cash and hire a good lawyer.

Sarbanes–Oxley Section 906: Criminal Penalties for CEO/CFO financial statement certification

§ 1350. Section 906 states: Failure of corporate officers to certify financial reports

(a) Certification of Periodic Financial Reports.— Each periodic report containing financial statements filed by an issuer with the Securities Exchange Commission pursuant to section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m (a) or 78o (d)) shall be accompanied by Section 802(a) of the SOX a written statement by the chief executive officer and chief financial officer (or equivalent thereof) of the issuer.

(b) Content.— The statement required under subsection (a) shall certify that the periodic report containing the financial statements fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of [1] 1934 (15 U.S.C. 78m or 78o (d)) and that information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of the issuer.

(c) Criminal Penalties.— Whoever— (1) certifies any statement as set forth in subsections (a) and (b) of this section knowing that the periodic report accompanying the statement does not comport with all the requirements set forth in this section shall be fined not more than $1,000,000 or imprisoned not more than 10 years, or both; or

(2) willfully certifies any statement as set forth in subsections (a) and (b) of this section knowing that the periodic report accompanying the statement does not comport with all the requirements set forth in this section shall be fined not more than $5,000,000, or imprisoned not more than 20 years, or both.

[Enterprising Investor]

American Realty Capital facing criminal probe over accounting-sources (10/31/14)

NEW YORK, Oct 31 (Reuters) - U.S. authorities have opened a criminal probe of American Realty Capital Properties in the wake of the real estate investment trust's disclosure that it had uncovered accounting problems, two sources familiar with the matter said on Friday.

The Federal Bureau of Investigation is conducting the investigation along with prosecutors from U.S. Attorney Preet Bharara's office in New York, the sources said. Further details of the probe could not be learned.

American Realty Capital Properties said on Wednesday it would have to restate earnings after it discovered employees "intentionally made" accounting errors that caused it to understate net losses during the first half of 2014. Its chief accounting officer and chief financial officer resigned on Tuesday.

Andy Merrill, a spokesman for American Realty Capital, had no immediate comment.

http://in.reuters.com/article/2014/10/31/usa-arcp-investigation-idINKBN0IK2EY20141031

[Enterprising Investor]

Investors Rethink American Realty-Linked REITs (10/31/14)

Accounting Woes Shake Popularity of Family of Unlisted Trusts

By Craig Karmin and Robbie Whelan

No one raises more money from small investors seeking to profit in real estate than Nicholas Schorsch. His family of nontraded real-estate investment trusts has raised nearly $21 billion since 2008, primarily from individuals investing through brokerage firms and investment advisers.

But a disclosure this week of accounting irregularities at his flagship company, publicly traded American Realty Capital Properties Inc., could spill over to his massive fundraising machine.

Shares of American Realty Capital Properties—one of the nation’s largest landlords to bank branches, restaurants and drug stores—have sunk 28% since the company said Wednesday that two executives had resigned after a measure of cash flow for the first quarter was overstated. The company said the employees intentionally decided not to correct the error in the second quarter. The two executives couldn’t be reached for comment.

The Securities and Exchange Commission plans to open an inquiry into the company related to the accounting disclosures, according to a person familiar with the situation.

The amount of money involved was relatively small—$23 million was said to be misstated. And Mr. Schorsch played down any spillover effect during a conference call this week with about 300 broker-dealers whose firms market his unlisted REITs. He said the accounting irregularities at his public REIT wouldn’t have any impact on his family of unlisted REITs.

Some brokers, however, say they have seen an increase in the number of investors looking to sell shares in some of the dozen unlisted REITs sponsored by companies affiliated with Mr. Schorsch, American Realty Capital’s founder and chairman.

“Some of the management of the nontraded entities are the same people managing an entity with accounting issues,” said Scott Crowe, chief investment officer for Resource Real Estate, an investment firm that buys shares of nontraded REITs on the secondary market. “It’s definitely a reputational thing.” Mr. Crowe said he had seen a slight uptick in the volume of investors looking to unload their shares of American Realty Capital products.

An executive at Central Trade & Transfer, a Lehi, Utah-based company that buys unlisted REITs in the secondary market, said that over the past 12 months his firm had traded only about $75,000 worth of American Realty Capital REITs. But this week, he said, the firm received calls from investors looking to sell a combined $2 million worth of these REITs.

National Planning Holdings Inc., which trades one of Mr. Schorsch’s unlisted REITs, told members on Thursday that it was temporarily suspending sales of the REIT “until further review,” a spokeswoman said. The firm has a network of four broker-dealers and nearly 4,000 registered representatives and advisers.

LPL Financial Holdings Inc., the largest network of independent financial advisers in the U.S., notified business partners this week that it has put some of Mr. Schorsch’s unlisted REITs “on our watch list.” The firm cited the “unknown extent of the impact” of the disclosure of the accounting irregularities, the note said. An LPL spokeswoman declined to comment further.

Andrew Backman, a spokesman for American Realty Capital, declined to comment for this article. Mr. Schorsch couldn’t be reached.

American Realty Capital Chief Executive David S. Kay said in a conference call Wednesday that the company had determined there was no intent to overstate the accounting measure for the first quarter, but that the second-quarter number was based on a calculation made “in order to conceal the error from the first quarter.” He called it “some bad judgment.”

Not all American Realty Capital investors think it’s time to sell. Shimshon Plotkin, founder of Plotkin Financial Advisors in Chevy Chase, Md., said he was buying shares of American Realty Capital Properties for clients during this week’s selloff.

Mr. Plotkin said he was encouraged that the accounting issues affected a small amount of money and were found by internal controls. “This is a superior management team,” he said. He said he had put “tens of millions of dollars” of his clients’ money in American Realty Capital nontraded REITs, adding that since 2011, these REITs have produced strong returns.

Mr. Schorsch began his career in real estate in the late 1990s by buying up hundreds of bank branches, which he eventually rolled into a REIT called American Financial Realty Trust, based in his hometown of Jenkintown, Pa. In 2006, he stepped down as CEO of American Financial and founded American Realty Capital as a nontraded REIT the following year. Unlike conventional REITs, nontraded REITs aren’t listed on a public stock exchange. Instead, shares are sold to small investors through networks of broker-dealers and personal financial advisers. The funds have a life cycle of anywhere from two to 10 years, which involves raising money, buying property and eventually liquidating through a merger or stock listing and returning money to investors.

Mr. Schorsch began raising billions of dollars through more than a dozen different funds, most of them using some variation of the American Realty Capital name, and expanded his empire by buying up brokerage firms as well, many of which sell shares in his REITs.

Meanwhile, American Realty Capital Properties began trading on Nasdaq in 2011 and embarked on a program of rapid expansion, becoming by this year the largest U.S. owner of single-tenant commercial real-estate. In July, American Realty Capital Properties closed on the $1.5 billion purchase of about 500 Red Lobster restaurant locations.

Mr. Schorsch’s unlisted REITs have raised $20.8 billion over the past seven years, which is more than any other REIT sponsor, according to investment bank Robert A. Stanger & Co. The American Realty Capital family has raised $6.6 billion for its unlisted REITs in 2014—or more than half of the money raised by the entire unlisted REIT industry this year. Stanger estimated that the average investor contribution was around $30,000.

Write to Craig Karmin at [e-mail] and Robbie Whelan at [e-mail]

http://online.wsj.com/articles/investors-rethink-american-realty-linked-reits-1414789368

[conix]

The Broker Dealers are starting to suspend the sales of non-Traded REITS from Shorsch.

[penny_mastery]

Awesome. Buy opportunity hoping to get it. About $8 a share...

[DoughRay]

Looking for 8.58 cloud support on the 5 and rising.

[DoughRay]

Looking for the intraday. Nice volume buzz again. GL

[MAZINGER Z]

Timbeeeeeeeeeeeeeeeer

[conix]

Schorsch's empire jolted by $23M accounting mishap

Execs replaced over what firm calls intentional errors; REIT king says problems will not affect other related firms





Oct 29, 2014 @ 2:45 pm

By Bruce Kelly


(Bloomberg News)


Nicholas Schorsch downplayed the impact a $23 million accounting error will have on his REIT empire in a conference call with 300 broker-dealer executives Tuesday.

Earlier in the day, Mr. Schorsch's flagship REIT, American Realty Capital Properties, disclosed that it had replaced its chief financial officer and accounting officer after the company's senior management learned of accounting errors that reduced its adjusted funds from operations – AFFO – over the first half of this year by close to $23 million.

Michael Sodo is the new CFO of ARCP, replacing Brian Block, who resigned effective immediately. Gavin Brandon is the new chief accounting officer, replacing Lisa McAlister.



ARCP is a giant net lease REIT, with a market capitalization of $11.5 billion.

In the conference call, Mr. Schorsch said that the problems with accounting at ARCP in no way would affect the number of nontraded REITs that are created by American Realty Capital, and sold by RCS Capital Corp., the leading wholesaler of nontraded REITs. Both firms are controlled by Mr. Schorsch.

“How does it impact any [ARC] programs? It doesn't,” Mr. Schorsch said on the conference call. “It doesn't impact any programs by Cole [Capital],” another of the nontraded REIT brands controlled by Mr. Schorsch, he added.

RCS Capital and American Realty Capital “are not involved,” he said. “None of those programs are part of this transaction. If you remember, ARCP is a publicly traded company with $23 billion in assets. [They] have different boards [and] no affiliation.”

“The headline is mistakes were made, identified and the people involved were identified,” Mr. Schorsch said. “It will be fully corrected. It's not something I'm proud of or happy about. It's a very difficult situation to sever relationship with Brian Block after all these years.”


One ARCP investor was clearly disappointed.

“I suspected that there would be cracks in the foundation, but I never imagined ARCP would overstate earnings,” said Brad Thomas, a REIT investor and editor of a REIT newsletter, The Intelligent REIT Investor. “It's obvious that a company that grows from $100 million to $20 billion in three years will have growing pains and specifically, integration risk.”

Accounting Officer Lisa McAlister (right) have both stepped down.

“As a value investor, I always pay close attention to fundamentals because they can tell us an awful lot,” he continued. “And while I was surprised with this latest news — the accounting snafu — I was buckled-up ready for the impact.” Mr. Thomas said he owned ARCP shares and was still long on the stock but was evaluating whether to sell.

“Now I must decide whether or not I can tolerate the continued volatility,” said Mr. Thomas. “More importantly, I am concerned about the sustainability of the dividend and whether ARCP can cover its all-important payout.”

ARCP's audit committee began investigating the accounting issues at the start of September, Mr. Schorsch said. Management learned of the accounting errors on Oct. 24 and worked immediately to correct the errors, he added. There was no involvement by regulators in the matter, Mr. Schorsch said.

Investors immediately punished Mr. Schorsch's publicly traded companies. In afternoon trading in New York, ARCP shares were trading at $8.80, down 28.9% for the day. Meanwhile, shares of RCAP were down 16.2% at $16.50.












Will ARCP recover from this fiasco?





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“The accounting issues are unacceptable and we are taking the personnel and other actions necessary to ensure that this does not happen again,” said ARCP's CEO, David Kay, in a statement Wednesday morning.

The accounting errors were intentional, the company said. ARCP's audit committee “believes that this error was identified but intentionally not corrected, and other AFFO and financial statement errors were intentionally made, resulting in an overstatement of AFFO and an understatement of the company's net loss for the three and six months that ended June 30, 2014.”

On the conference call, Mr. Schorsch downplayed the overall financial impact of the reduction of $23 million from adjusted funds from operations.

“There's no impact to net income” of ARCP, Mr. Schorsch said. “Also, GAAP financial statements are not impacted. The previously announced transactions with Blackstone and others are not impacted. The dividend has been reaffirmed.” ARCP said in May that it intended to sell most of its multitenant shopping-center buildings to affiliates of Blackstone Group for $1.98 billion in cash. That deal has yet to close.