{"id":18179,"date":"2019-07-18T11:06:59","date_gmt":"2019-07-18T16:06:59","guid":{"rendered":"https:\/\/www.investorlawyers.com\/?p=7268"},"modified":"2019-07-18T11:06:59","modified_gmt":"2019-07-18T16:06:59","slug":"ar-capital-nick-schorsch-and-brian-block-settle-reit-fraud-case-for-60m","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/ar-capital-nick-schorsch-and-brian-block-settle-reit-fraud-case-for-60m\/","title":{"rendered":"AR Capital, Nick Schorsch, and Brian Block Settle REIT Fraud Case for $60M"},"content":{"rendered":"<p>\t\t\t\tA $60M settlement has been reached between The <a href=\"https:\/\/www.sec.gov\" target=\"_blank\" rel=\"noopener noreferrer\">US Securities and Exchange Commission (SEC) <\/a>and AR Capital, the <a href=\"https:\/\/www.investorlawyers.com\/?s=REIT\">real estate investment trust (REIT)<\/a> manager&#8217;s founder Nicholas Schorsch, and American Realty Capital Properties Inc. (ARCP) ex-CFO Brian Block. The three of them are accused of \u201cwrongfully obtaining\u201d millions of dollars related to two mergers involving REITS that AR Capital managed and sponsored.<\/p>\n<p>According to the regulator\u2019s complaint, between the latter part of 2012 and the beginning of 2014, AR Capital took steps so that ARCP, a publicly traded REIT, would merge with American Realty Capital Trust III and American Realty Capital Trust IV, two non-traded REITS that were publicly held. Schorsch was the principal owner and CEO of all three REITs during the time of the merger, while Block was the CFO and a minority shareholder.<\/p>\n<p>The Commission contends that without their board\u2019s permission, the REIT manager, Schorsch, and Block \u201cinflated an incentive fee\u201d during the mergers, which made it possible for them to get another $2.92M in ARCP operating partnership units as a portion of their \u201cincentive-based\u201d compensation.\u201d The SEC is also accusing the three defendants of \u201cwrongfully obtaining\u201d at least $7.2M in charges that were not supported from the sale and asset purchase agreements that were related to the mergers.<\/p>\n<div class=\"read_more_link\"><a href=\"https:\/\/www.investorlawyers.com\/blog\/ar-capital-nick-schorsch-and-brian-block-settle-reit-fraud-case-for-60m\/\"  title=\"Continue Reading AR Capital, Nick Schorsch, and Brian Block Settle REIT Fraud Case for $60M\" class=\"more-link\">Continue Reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>A $60M settlement has been reached between The US Securities and Exchange Commission (SEC) and AR Capital, the real estate investment trust (REIT) manager&#8217;s founder Nicholas Schorsch, and American Realty Capital Properties Inc. (ARCP) ex-CFO Brian Block. The three of them are accused of \u201cwrongfully obtaining\u201d millions of dollars related to two mergers involving REITS [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":7092,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3794,3760,3795,3761],"tags":[3497,3793,2835],"class_list":["post-18179","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-investment-fraud","category-sec-enforcement","category-sec-settlements","category-securities-and-exchange-commis","tag-american-realty-capital-properties","tag-ar-capital","tag-vereit"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>AR Capital, Nick Schorsch, and Brian Block Settle REIT Fraud Case for $60M &#8212; Investor Lawyers Blog &#8212; July 18, 2019<\/title>\n<meta name=\"description\" content=\"A $60M settlement has been reached between The SEC and AR Capital, the REIT manager&#039;s founder Nicholas Schorsch, and ex-CFO Brian Block.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.investorlawyers.com\/blog\/ar-capital-nick-schorsch-and-brian-block-settle-reit-fraud-case-for-60m\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"AR Capital, Nick Schorsch, and Brian Block Settle REIT Fraud Case for $60M &#8212; Investor Lawyers Blog &#8212; July 18, 2019\" \/>\n<meta name=\"twitter:description\" content=\"A $60M settlement has been reached between The SEC and AR Capital, the REIT manager&#039;s founder Nicholas Schorsch, and ex-CFO Brian Block.\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/www.investorlawyers.com\/blog\/wp-content\/uploads\/2019\/05\/stock-sheets-overlay.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Shepherd Smith Edwards &amp; Kantas, LLP\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"AR Capital, Nick Schorsch, and Brian Block Settle REIT Fraud Case for $60M &#8212; Investor Lawyers Blog &#8212; July 18, 2019","description":"A $60M settlement has been reached between The SEC and AR Capital, the REIT manager's founder Nicholas Schorsch, and ex-CFO Brian Block.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.investorlawyers.com\/blog\/ar-capital-nick-schorsch-and-brian-block-settle-reit-fraud-case-for-60m\/","twitter_card":"summary_large_image","twitter_title":"AR Capital, Nick Schorsch, and Brian Block Settle REIT Fraud Case for $60M &#8212; 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