On December 16, the Wall Street Journal reported that American Realty Capital Properties Inc ARCP had been cut by Moody's to "junk" (Ba1) with a negative outlook. The rating agency cited concerns over the recent accounting irregularities, cover-up, executive shake-up and ongoing investigations.
However, nothing is so bad that it can't get worse when it comes to the negative headlines surrounding the ARCP saga.
Just ask shareholders of RCS Capital Corp RCAP, whose shares were crushed Thursday, December 18, following a news report that reflected negatively on their current Executive Chairman Nicholas Schorsch.
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Where previously there was smoke, there is allegedly now a "smoking gun." On December 18, the Wall Street Journal broke the news that former ARCP Chief Accounting Officer (CAO) Lisa McAllister had filed a lawsuit alleging defamation against ARCP, former CEO and Chairman Nick Schorsch and former CEO David Kay.RCS Capital Recent Upgrades
Ironically, RCS Capital management has been meeting with investment bank analysts, and explaining why the company is well positioned to be successful in 2015 and beyond.Bottom Line
The ARCP related crisis of confidence is dragging down RCAP shares despite the favorable views from Wall Street sell-side analysts. At this point it appears that the controversy surrounding RCAP Executive Chairman Schorsch has now reached a tipping point.© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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Posted In: REITLegalManagementTop StoriesGeneralReal EstateBarclay'sCitigroupDavid KayLisa McAllisterMoody'sNicholas Schorsch
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