Realty Capital Securities Charged with Fraud in Massachusetts
The state of Massachusetts has charged Realty Capital Securities (RCS) with fraudulently rounding up proxy votes in order to support real estate deals sponsored by Nicholas Schorsch’s AR Capital.
RCS is the brokerage arm of RCS Capital, in which Schorsch is a principal shareholder. RCS markets certain nontraded REITs and other investment alternatives. According to the complaint, agents of RCS impersonated shareholders and cast fake proxy votes for programs sponsored by AR Capital.
One of the incidents occurred in June, while another took place in September. The September vote was required for Apollo Global Management to buy real estate assets from Schorsch – although that deal fell apart, Apollo did purchase RCS.
The complaint also alleges that RCS used strong-arm tactics to win proxy votes, including telling leaders of the firm and its agents to prioritize proxy solicitation calls or risk being fired. The state of Massachusetts is currently seeking to revoke RCS’ broker-dealer registration and to fine the company.
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The attorneys at Dimond Kaplan & Rothstein, P.A. have helped recover more than $100 million from some of the largest banks and brokerage firms in the world. If you invested with RCS or RCS Capital, you may have certain legal rights that require your immediate attention. Contact us to schedule an appointment or consultation today.