Nicholas Schorsch’s Midtown-based commercial real estate investment firm American Realty Capital Properties fired its chief financial officer Brian Block, citing accounting errors that exaggerated the company’s earnings.
Financial data in American Realty Capital Property reports from last year and the first half of this year “should no longer be relied upon,” the firm announced.
An audit committee’s probe found that Block intentionally did not fix the mistakes. The errors resulted in an overstatement of the year’s adjusted funds from operations and understatement of net losses through late June.
The news about American Reality Capital’s accounting mistake sent the company’s share price plunging. At the end of trading Wednesday, the stock price for the REIT was down nearly 20 percent.
Michael Sodo — who served as director of financial reporting, senior vice president and treasury – will replace Block as CFO, Forbes reported.
Schorsch revealed plans in June to step down as CEO of American Realty Capital sometime this month, as previously reported. New York REIT, one of the real estate investment trusts sponsored by American Realty, raised $1.7 billion from investors just prior to a stock exchange listing in April, as The Real Deal reported. Among the REIT’s commercial property buys was the acquisition of a 756,000-square-foot office tower at 1440 Broadway for $528.6 million. [Forbes] — Mark Maurer