Run away... just 6 weeks ago when we first highlighted the FBI was probing multi-billion-dollar REIT American Realty Capital [6], the company's stock crashed, wiping out billions leading the CEO to note, "we don't have bad people, we had some bad judgment there." Now, as The WSJ reports, [7] it appears the CEO David Kay, COO Lisa Beacon, and founder & Executive Chairman Nicholas Schorsch have all decided to "stabilize the company and... strengthen future leadership and strategy," by jumping ship. We are sure their jets will be fueled up and ready for the nearest extradition-free nation...
As The Wall Street Journal reports [7],
Embattled real-estate investment trust American Realty Capital Properties Inc. announced a dramatic management shake-up early Monday morning as Nicholas Schorsch, the company’s founder and executive chairman, resigned.
The move comes just over six weeks after an accounting scandal shook the company and erased more than $3 billion from the REIT’s market value.
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Mr. Schorsch also resigned from the boards of several notraded REITs managed by Cole Capital Advisors Inc., an affiliate of American Realty Capital Properties.
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In a surprise move, David Kay, the company’s chief executive since the end of September, and Lisa Beeson, a longtime deputy to Mr. Schorsch, also stepped down Monday morning. Mr. Kay had been handling the damage control after the accounting irregularities had been announced, meeting with investors and analysts in an effort to contain the scandal.
The company said that board member William Stanley had been appointed lead independent director and would sever as interim chief executive officer and chairman until replacements could be found.
“The actions taken today will stabilize the company and are necessary to strengthen future leadership and strategy, improve governance, and complete a separation from Nick Schorsch and his affiliates,” Mr. Stanley said in a statement. “These actions build on ARCP’s significant real estate assets and asset management capabilities, and will further restore investor confidence in ARCP.”
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The company said its financial results going back as far as 2013 could no longer be relied upon, and hired outside counsel and auditors to investigate the financial results.
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When the tide rolls back, they will all be exposed...
[8]
