Published On: November 19, 2015

The Vanguard Group and its affiliates have filed suit against Vereit, Vereit Operating Partnership, AR Capital, ARC Properties Advisers, RCAP Holdings, RCS Capital Corporation and five former company executives. Vereit is accused of an accounting fraud that cost investors billions. Vereit was a moderate-sized company with $132 million in assets in 2011 and in 2014, it ballooned to $21.3 billion in assets. The lawsuit claims that Nicholas Schorsh, squired real estate companies on the premise that they would help grow the company, but Vanguard alleges his true motive was to “rob shareholders and to give to himself and his friends.” Vanguard also alleged that Schorsh transferred hundreds of millions of dollars to entities controlled by him or other top executives and that the company’s financial statements were “riddled with error,” including a miscalculation that inflated its “adjusted funds from operations” and gave the company access to additional capital. In October 2014, Vereit disclosed an audit report of an “intentionally made” accounting error that was “intentionally not corrected,” and stock prices dropped by 36% costing investors billions of dollars. The individual defendants in the claim include Nicolas Schorsch, David Kay, Brian Block, Lisa Pavelka McAlister and Lisa Beeson. If you invested money with Vereit, or any of its affiliates, please call our securities law firm in Chicago for a free consultation with an attorney. We may be able to help you recover your financial losses with Vereit.

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