SEC charges ARCP executives 09 September 2016New York Reporter: Shirley Fehr Rodriguez
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The US Securities and Exchange Commission (SEC) has charged two former accounting executives with overstating the financial performance of a real estate investment trust.
Former American Realty Capital Properties (ARCP) CFO Brian Block and chief accounting officer Lisa McAlister allegedly devised a scheme to manipulate the calculation of ARCP’s adjusted funds from operations (AFFO), a non-generally accepted accounting principle (GAAP) measure used when the company provided earnings guidance, according to the SEC’s complaint.
Sanjay Wadhwa, senior associate director of the SEC’s New York regional office, said: “We allege that these senior executives conjured up numbers to purposely conceal ARCP’s true performance, misleadingly suggesting that the company had met AFFO estimates for the first and second quarters of the year.”
The incident allegedly occurred when Block falsified the company’s AFFO presentation by increasing the figures just before filing the Q2 results.
In a parallel action, the US Attorney’s Office for the Southern District of New York has also filed criminal charges against Block and McAlister.
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