Fee-driven scheme behind American Realty deals
Investors' class action accuses managers of manipulating data to inflate stock for takeovers, which generate fees, and that didn't deliver promised benefits to Reit or shareholders
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New York
BEHIND the accounting errors that knocked US$4 billion off American Realty Capital Properties Inc's market value was a hidden scheme that generated more than US$900 million in managers' fees and bonuses, investors said in a lawsuit against the company.
Ex-chairman Nicholas Schorsch turned a small real estate investment trust into a massive engine of payments for himself and cronies, adding US$20 billion of assets in two years and charging for services rendered by 47 entities he controlled, according to court documents filed this week.
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