Former CFO of American Realty Capital Partners Found Guilty of Securities Fraud
A federal jury in Manhattan has found Brian Block, the former chief financial officer of American Realty Capital Partners, guilty of inflating a key metric used to evaluate the financial performance of publicly traded real estate investment trusts.
Block’s co-defendant, former chief accounting officer Lisa McAlister, pled guilty to securities fraud and related charges on June 29, 2016.
According to allegations contained in the Indictment and evidence presented during the trial in Manhattan federal court, in 2014, ARCP was a publicly traded REIT headquartered in Manhattan, New York.
ARCP’s securities traded under the symbol ‘ARCP’ on the National Association of Securities Dealers Automated Quotations (‘NASDAQ’) exchange.
Block was convicted of securities fraud, and the trial revealed that when it looked like ARCP would not meet investors’ expectations, Block made up numbers and fudged the books.
The integrity of our markets rests on the truth of the financial information provided to investors. And those like Block who lie and manipulate the markets must be identified and held to account.
Acting Manhattan U.S. Attorney Joon H. Kim said, ‘As a unanimous jury found today, Brian Block, the former CFO of ARCP, intentionally misled investors by overstating the health and profitability of his company.’
Block’s actions resulted in an overstatement of ARCP’s AFFO per share of $0.03 per share.
The correct AFFO for the first quarter of 2014 was $0.23 per share.
Block’s sentencing is pending.
Key Facts
- State: New York
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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