The Real Deal New York

After scandal, Schorsch-led brokerage scraps $700M acquisition of REIT advisory firm

Billionaire's RCS Capital was set to buy Cole Capital
November 03, 2014 01:26PM

In the wake of an accounting scandal plaguing Nicholas Schorsch’s American Realty Capital Properties, RCS Capital Corporation — a retail investment sales brokerage also chaired by Schorsch — has scrapped plans to acquire Cole Capital Advisors for $700 million from the firm.

American Realty Capital had announced plans on Oct. 1 to sell Phoenix-based Cole Capital, which distributes shares and handled advisory services for five nontraded real estate investment trusts to RCS.

But now, the buyer isn’t going ahead with the deal, according to the Wall Street Journal. Last week, American Realty Capital revealed it didn’t disclose accounting errors that inflated quarterly earnings.

The backlash led to the exits of two key executives, as well as lawsuits and a Securities and Exchange Commission investigation, as previously reported. [WSJ]Mark Maurer