NEW YORK (TheStreet) -- Who knew that a billionaire could have such a bad week? Real-estate big shot Nicholas S. Schorsch has been watching shares of his publicly held American Realty Capital Properties (ARCP) tank over the past week after the company announced that errant financial executives had "intentionally" made $23 million in accounting errors.
The company's Audit Committee investigated the accounting missteps and two senior financial executives resigned and were replaced. But with more investigations pending, according to Reuters and The Wall Street Journal, investors drew the reasonable conclusion they should bail not only from ARCP, the biggest owner of restaurant and other single-tenant properties, but also from other companies run by Schorsch.
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That included stock in RCS Capital (RCAP) , a New York-based investment firm that had 9,200 financial advisors at mid-year and shares the same address and telephone number as ARCP. Around the time that books were being cooked at ARCP, Schorsch was exulting the fruits of an aggressive brokerage acquisition spree at RCS, where he serves as executive chairman.
Among those purchases was the June 12 acquisition of Atlanta-based J.P. Turner Associates -- "one of the finest independent retail broker-dealers in the nation," by Schorsch's account.
It's a curious commendation given J.P. Turner's sordid regulatory history. Maybe in RCS's rush to add to its broker ranks it didn't pay attention to things like serial account churning and supervisors who ignored red flags. Worse would be that management knew about the ugly details and decided to buy it anyway.
Spokespeople for RCS and Turner declined to comment.