Larry Roth Resigns as CEO of RCS Capital

RCS Capital Corporation (NYSE: RCAP), the embattled brokerage firm founded by Nicholas Schorsch, announced that Larry Roth has resigned after a two-month stint as chief executive officer. According to a filing with the Securities and Exchange Commission, he did not resign because of a disagreement with the company or its board of directors.

Roth, who replaced Michael Weil as CEO in November, will continue to serve as the chief executive officer of Cetera Financial Group, the company’s wholly-owned independent retail advice division.

Bradley Scher, an independent director and chairman of the executive committee, replaced Roth as RCAP’s CEO. He will be paid $20,000 per month.

Since 2002, Scher has served as the managing member of Ocean Ridge Capital Advisors, an independent consulting company that advises companies experiencing financial or operating challenges. Over the past five years, he has served as a director on ten boards of directors of private companies and one public company.

As reported by The DI Wire, RCS Capital plans to file voluntary Chapter 11 bankruptcy at the end of the month. The firm also reached an agreement with key lenders to invest $150 million into Cetera Financial Group and take the company private.

RCS Capital has been hammered since October 2014 when a $23 million accounting error and subsequent cover-up was revealed by another Schorsch-controlled entity, American Realty Capital Properties Inc., now Vereit (NYSE:VER).

Last November, the firm’s wholesale distribution business, Realty Capital Securities, was charged with proxy fraud by the state of Massachusetts for fabricating shareholder votes. To settle the charges, it agreed to pay a $3 million fine and close its doors.