The Real Deal New York

United Realty exec claims he was fired for discovering illegal deals

REIT's former chief compliance officer is suing CEO Jacob Frydman

February 10, 2015 08:00AM
By Mark Maurer

united-realty

From left: Jacob Frydman and Albert Akerman

UPDATED, 2:20 p.m., Feb. 10: A former top executive at United Realty unearthed shady business in the firm’s books, and was fired for his troubles, he claims in a new lawsuit.

Albert Akerman, who oversaw compliance for a broker-dealer securities arm of the real estate investment trust, is suing CEO Jacob Frydman for wrongful termination which he claims came about after he found several illegal transactions in the firm’s books.

He is seeking the return of a $500,000 investment he made upon becoming a limited partner at United Realty, according to a lawsuit filed Friday in New York State Supreme Court.

Akerman joined the firm shortly after it was founded in 2011, and was then promoted to chief compliance officer at Cabot Lodge Securities, a financial services firm run by Craig Gould and spun off from United Realty Trust. Cabot Lodge Securities was created to sell shares of United Realty, among other REITs.

Frydman was initially named as the sole defendant in the suit, but the complaint was amended Monday to also name Cabot Lodge Securities, Gould and an LLC affiliated with United Realty.

During a seven-month period ending in late October, Akerman observed “numerous transactions that were cause for concern, and in some instances, in complete violation of the law,” the suit states.

Akerman alleges that Frydman was desperate for capital amid several recent disputes — including a series of lawsuits involving Frydman’s former partner Eli Verschleiser over a botched purchase of an office tower at 866 United Nations Plaza. Frydman sought a temporary restraining order against Verschleiser in April.

United Realty’s suspicious transactions stemmed from a combination of unsatisfied judgments, breach of personal loans and a misappropriation of company assets such as Frydman putting his housekeeper on the payroll, according to the suit.

Frydman responded to the lawsuit, claiming that Akerman “is in desperate need of money” and is conspiring with Verschleiser.

“Akerman’s lawsuit is a frivolous and unsupportable lawsuit,” Frydman said in a statement provided to The Real Deal. “A motion to dismiss will be filed as soon as we are served with the papers.”

To date, Frydman’s Lower Manhattan-based REIT said it has invested in or advised on more than $2 billion in real estate nationally.

Akerman reported his findings to the Financial Industry Regulatory Authority, which conducted an investigation, the suit said. He “sought to obtain any information that could be beneficial to prevent further fraud and misappropriation of investor and public funds,” according to the suit.

Frydman and Gould then terminated Akerman on Dec. 15, according to the suit. The complaint accuses Frydman of breach of contract, defamation and making a wrongful termination.

  • I know

    Frydman is a failed con man for many year. Just look around the Internet and see how many terrible stories about him exist.

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