October 10, 2016

September 8, 2016

The SEC charged two former accounting executives with American Realty Capital Properties (ARCP), now known as VEREIT Inc., with overstating the financial performance of ARCP’s publicly-traded real estate investment trust (REIT).  According to the SEC’s complaint, Brian Block, then ARCP’s CFO, and Lisa McAlister, then ARCP’s Chief Accounting Officer, manipulated the calculation of ARCP’s adjusted funds from operations (AFFO), a key non-GAAP financial metric used by analysts and investors to assess the company’s performance.  Allegedly, after warnings from internal accounting staff that AFFO was incorrectly calculated in ARCP’s 2014 first quarter financial results, Block, with McAlister’s knowledge, falsified the company’s AFFO presentation in the final hours before filing the company’s second quarter results, to make it appear that the company had met second-quarter estimates when in fact it had fallen short.  SEC

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