Vereit Settles SEC Fraud Case to Tune of $8 Million

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The United States Securities and Exchange Commission (SEC) recently charged Vereit, Inc. (previously known as American Realty Capital Properties, Inc.) with intentionally overstating important performance metrics, a form of fraud. As a result, Vereit agreed to settle the charges by paying an $8 million penalty, which will be shared among defrauded investors.

Case background

According to the SEC, former senior executives for the company falsely reported the company’s adjusted funds from operations (AFFO) and manipulated the numbers thereof. AFFO is a crucial non-GAAP performance measure tracked by investors as they seek to assess a company’s financial performance.

A company that manipulates its AFFO numbers provides faulty information to its investors, meaning investors are then making their decisions without accurate information to guide them. This is a form of fraud.

Senior executives for Veriet were also criminally charged in connection with the fraud; one was convicted, and another pleaded guilty.

In settling the case, Veriet does not admit or deny the findings. However, it does consent to the SEC order finding Veriet violated antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The order also created a Fair Fund to distribute the money from the settlement to investors who were harmed as a result of Veriet’s actions.

Many instances of fraud are only uncovered due to the brave actions of internal whistleblowers. If you are aware of fraud or other wrongdoing occurring within your company, it is important to seek the representation of skilled whistleblower attorneys as you prepare to blow the whistle. Contact an experienced lawyer at Kardell Law Group for more information on how to proceed with your case.

By Steve Kardell | Published October 29, 2020 | Posted in Fraud | Tagged defrauded investors, financial fraud, Securities and Exchange Commission, Veriet

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