American Realty Capital Properties (ARCP) is experiencing some serious repercussions after its $23 million accounting error was revealed two weeks ago. According to published reports, several custodial firms have put the kibosh on sales of Cole Capital’s non-traded investment products. Cole is owned by ARCP.
After RCS Capital Corporation (RCAP) terminated its agreement to purchase Cole Capital, ARCP countered with a lawsuit against RCAP. In addition, ARCP and its related companies have taken a tumble in the stock market.
The latest installment of punishment for the Schorsch-led companies finds Schwab, Pershing, and Fidelity halting sales of AR Capital and Cole REITs. The three custodial firms join a number of independent broker-dealers that have also pulled away from the Schorsch brand.
According to reports, Schwab, Pershing, and Fidelity are no longer willing to facilitate the purchase of products sponsored by Cole, pending further investigation. It is also rumored that TD Ameritrade is monitoring the situation to see how it develops.