Things are looking gloomy these days for Nicholas Schorsch. He is reportedly no longer a billionaire, he resigned last week as chairman of ARCP and his hold on RCS Capital is crumbling as people call for his resignation in the wake of a new lawsuit which accuses the hedge fund manager of asking an employee to falsify accounting documents.
Lisa McAlister, a former chief accounting officer of American Realty Capital Properties, filed the lawsuit in which she claims that she was fired by Schorsch only because she brought the accounting errors to his attention. She claims that she discovered deliberate attempts to hide various accounting mistakes in the firm’s books.
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AR Capital, of course, has dismissed her allegations as groundless. It released a statement saying, “Mr. Schorsch denies the allegations and intends to defend against the claims vigorously. We are confident that Mr. Schorsch has engaged in no unlawful conduct. Although the ARCP Audit Committee investigation is continuing, we understand that to date there has not been any conclusion of unlawful conduct by Mr. Schorsch.” But Schorsch still resigned anyway.
American Realty Capital Properties is a $7.35 billion market cap real estate investment trust.
Now Business Insider is reporting that his days with RCS Capital are numbered. “We see the resignation of Mr. Schorsch as imperative, ” William Katz, a Citigroup Global Markets analyst, wrote in a research note on Thursday.
Katz added that Schorsch should go, “to quell the concern on the shares, as the longer he is involved with the firm the longer the overhang and questions on RCAP’s financial statements will likely persist.”
Meanwhile Forbes is reporting that Schorsch is not even a billionaire anymore. The publication has implied that his wealth and status may just have been a house of cards writing, “analysts have long complained that the company management–and in particular Schorsch–have had difficulty providing transparency, and that Schorsch became inappropriately adversarial when questions were raised about the company’s numbers. Analysts noticed sloppy accounting errors well before the October admission.”
Now his firms have plummeted in value based on new assessments of their holdings and this has reduced Schorsch’s own estimated wealth by as much as $1 billion.
Considering the time of year maybe Mr. Schorsch should ask for some help from another Nicholas, St Nic that is.