According to InvestmentNews, Massachusetts securities regulator has expanded their investigation. Secretary Galvin began investigating the wholesaling broker-dealer arm of Nicholas Schorsch REIT empire, Realty Capital Securities, earlier this year.
The Commonwealth was investigating the way REITs were sold to Massachusetts residents. Specifically, what information was given to investors and what investors were told about accounting at the REITs. The investigation was launched shortly after the alleged accounting error at American Realty Capital Properties (ARCP) that was intentionally not corrected.
According to InvestmentNews, the investigation will now include three additional entities controlled by Schorsch: American Realty Capital Properties (ARCP),American Realty Capital, and RCS Capital Corp. The expanded investigation also aims to uncover what knowledge certain executives knew regarding the accounting error and when they knew it.
The widening investigation coincides with a defamation lawsuit filed against ARCP, Schorsch and former CEO, David Kay. According to InvestmentNews, the lawsuit by Lisa McAlister, former ARCP chief accounting officer, alleges that she and another executive were made scapegoats to cover-up the $23 million accounting error.
The White Law Group continues to investigate potential claims on behalf of investors to recover losses in ARCP and other REITs. If you own interests in REITs and would like to discuss your litigation options, please call the securities attorneys of The White Law Group at 312-238-9650 for a free consultation.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm dedicated to the representation of investors in FINRA arbitration claims against brokerage firms throughout the United States. Our offices are located in Chicago, Illinois and Vero Beach, Florida.
For more information on The White Law Group, please visit the firm’s website at www.WhiteSecuritiesLaw.com.