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VEREIT pays $43M in latest round of legal settlements

The firm has paid $217.5 million to settle claims from shareholders since June

Glenn Rufrano (Credit: Getty Images)
Glenn Rufrano (Credit: Getty Images)

VEREIT continues to settle legal claims in relation to a 2014 accounting scandal under former chief executive Nicholas Schorsch.

The firm, previously known as American Realty Capital, spent $42.5 million in a fresh round of payouts to settle four class-action lawsuits, bringing its total to $217.5 million since last June.

The four cases, which were pending in the Southern District of New York, were filed by funds with ties to investment firms such as Cohen & Steers, Fir Tree Partners and Archer Capital Management.

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With the payouts, VEREIT has now entered into settlements with entities that hold 31 percent of its shares. A representative for the firm declined to comment and pointed to the fact that the agreements did not contain any admission of wrongdoing.

VEREIT started settling accounts with shareholders last June, when it agreed to a $90 million payout to Vanguard Group. The firm followed up with another batch of settlements earlier this month. The second tranche of payouts, which total $85 million, was disbursed to settle eight class-action lawsuits filed by investors such as Blackrock and Clearline Capital Partners.

The lawsuits were filed after the firm submitted a doctored second quarter report in 2014 to meet Wall Street forecasts. The scandal led to an 18-month prison sentence for former CFO Brian Block and the resignation of company heads Nicholas Schorsch and David Kay.

The company has since dodged prosecution from regulators over the incident. In an announcement last May, the firm said that the United States Attorney’s Office has declined to file criminal charges over the case. The company also said that it was negotiating with the Securities and Exchange Commission over the dismissal of civil charges.

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