Institutional Investors Sue American Realty Capital Properties
TIAA-CREF, New York City Retirement Systems (NYCRS) and other investors recently filed complaints in the U.S. District Court in New York against American Realty Capital Properties (ARCP), a real estate investment trust.
Deceiving the market
The suit alleges that ARCP violated securities law by misrepresenting the company’s business and prospects, deceiving the market and artificially inflating prices of its securities.
According to the NYCRS’s filing, ARCP misstated its adjusted funds from operations by about $23 million in the first and second quarters of 2014. The filing also claims that at the end of October, the company acknowledged the errors and senior executives knew about the false information but made no corrections.
Artificially inflated stock prices
NYCRS’ complaint also claims that the real estate investment trust intended to induce unsuspecting investors to purchase American Realty securities at artificially inflated prices.
Several of ARCP’s issuers, underwriters and its auditor were also named as defendants in the case.
In addition, the Ohio Public Employees Retirement System, Columbus, and the Ohio State Teachers’ Retirement System, Columbus, also filed suit, after losing $7.5 million as a result of the alleged fraud.
One source states that the revelation of the alleged fraud resulted in the company’s stock value dropping by about $3 billion.
The team of investment fraud lawyers at Starr Austen & Miller LLP fights for the protection of investors and handles cases involving securities arbitration misrepresentation, overconcentration, broker fraud, negligence and breach of trust.
Source: Investment News