NEW YORK (TheStreet) -- Shares of RCS Capital Corp. (RCAP) closed down 15.31% to $9.95 after it was reported that Chairman Nicholas Schorsch, the former chairman of American Realty Capital Properties (ARCP) , allegedly directed two executives to manipulate ARCP's quarterly financial results, the Wall Street Journal reports.
The complaint, filed Thursday in New York State court by former Chief Accounting Officer Lisa McAlister, is part of a defamation suit against the real-estate investment trust ARCP, Schorsch and former CEO David Kay, the Journal said.
The case centers on the alleged role played by Schorsch in an accounting scandal that so far has erased $3.5 billion from American Realty Capital Properties' market value, the Journal added.
Shares of RCS Capital, an investment company, plummeted in afternoon trading. RCS Capital earlier this month agreed to pay ACRP about $60 million to settle a lawsuit over a canceled deal to buy the REIT's Cole Capital unit.
Shares of RCS Capital traded with heavy volume today, with more than 6.56 million shares changing hands by the market close in New York, compared to the average of 1.82 million shares.
ARCP stock closed down 3.86% at $8.09.
Separately, TheStreet Ratings team rates RCS CAPITAL CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation: