Vereit Inc. (fka American Realty Capital Properties) Settles Class Action Lawsuit
Vereit Inc. (NYSE: VER), a publicly traded REIT formerly known as American Realty Capital Properties (ARCP), has agreed to pay $738.5 million to settle a class action lawsuit in connection with AR Global’s 2014 accounting fraud scandal, according to an article in the DI Wire.
Vereit will reportedly pay $738.5 million, while former external manager AR Global and its principals will pay an additional $225 million, former CFO Block is responsible for $12.5 million, and the firm’s former auditor will pay $49 million.
Block and the former chief accounting officer were reportedly convicted of fraudulently inflating ARCP’s second quarter 2014 financials by $13 million. Block is reportedly appealing his conviction after being sentenced to 18 months in federal prison, while his former chief accounting officer reportedly cooperated with the prosecution.
After the REIT’s market value dropped by more than $3 billion Schorsch resigned as executive chairman, and American Realty Capital Properties changed its name to Vereit, Inc.
The $1.025 billion class action settlement will reportedly resolve the claims by plaintiffs relating to the accounting disclosure made by ARCP in October 2014 and in March 2015 regarding the restatement of certain of its previously issued financials, according to the article.
In July we told you about the SEC’s recent charges against AR Capital LLC, its founder Nicholas S. Schorsch, and its former CFO Brian Block with wrongfully extracting millions of dollars in connection with two separate mergers between real estate investment trusts (REITs) that were reportedly sponsored and externally managed by AR Capital, including ARCP.
The White Law Group continues to investigate claims involving broker-dealers who may have unsuitably recommended American Realty Capital REITs to investors.
Non-Traded REITs are complex products that involve a significant degree of risk and arguably unsuitable for many investors. Brokerage firms that overlooked suitability requirements or failed to disclose the risk when recommending American Realty Capital REITs to investors, may be liable for losses.
If you invested in VEREIT Inc. or AR Realty Properties and would like to discuss your litigation options with a securities attorney, please call The White Law Group at 1-888-637-5510 for a free consultation.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee.