The investigation into American Realty Capital and Nicholas Schorsch REIT empire continues. What started out as a $24 million dollar accounting error has led to investigations by the U.S Justice Department, Securities Exchange Commission, and some state investigators.

According to Bloomberg Business, a class action alleges a hidden scheme to generate more than $900 million in managers’ fee and bonuses. “In their class action, begun in January, teachers’ pension funds that lost money on American Realty shares accused managers of manipulating cash-flow data to inflate the stock for takeovers. Those deals were “designed” to generate fees for the executives and didn’t deliver the promised benefits to REIT or its shareholders, the funds says.”

Furthermore, reports indicate that recent court documents accuse Ex-chairman Nicholas Schorsch of adding $20 billion of assets and charging for services rendered by 47 entities he controlled.

REITs are generally considered complex, high-risk securities products. As such, many states have set guidelines specific to REIT sales. Broker dealers that sell REITs have a responsibility to make investment recommendations that are consistent with the investors risk tolerance, financial objectives, investment experience and net worth. When broker dealers fail to make suitable investment recommendations they may be liable for investment losses.

The White Law Group continues to investigate potential claims on behalf of individual investors to recover losses in ARCP and other REITs. If you own interests in REITs and would like to discuss your litigation options, please call the securities attorneys of The White Law Group at 312-238-9650 for a free consultation.

For more information on The White Law Group, please visit the firm’s website at www.WhiteSecuritiesLaw.com.