Saturday, January 10, 2015

RH Jones: Retired teachers owe Attorney General DeWine our thanks

From RH Jones, January 10, 2015 
To retired and active educators:

Please read Attorney General Mike DeWine’s press release below.  We retired and active educators owe him our thanks for going after the American Capital Properties (ARCP) for their alleged “cover-up”  of accounting fraud causing our OHSTRS to lose millions of dollars.

RJ 
Attorney General DeWine to Seek Lead Plaintiff Status for Ohio Pension Funds in Securities Lawsuit
12/30/2014 

(COLUMBUS, Ohio) 
Following a recent review of securities and accounting fraud allegations, Ohio Attorney General Mike DeWine announced that he has filed a motion for two of Ohio’s pension funds to lead a class of investors in a lawsuit against American Realty Capital Properties (ARCP), Inc. The news comes after the company, a real estate investment trust based in New York City, disclosed that ARCP officials intentionally misstated company financials, and subsequently covered up the accounting irregularities, resulting in approximately $3 billion in losses for the company’s shareholders, including State Teachers Retirement System of Ohio (STRS) and the Ohio Public Employees Retirement System (OPERS).  
“The information American Realty Capital Properties provided pension fund managers was false, misleading, and purposefully hid accounting fraud,” said Attorney General DeWine. “This fraud inflated the true value of the company, causing Ohio teachers and public employees to lose millions of hard-earned retirement dollars.” 
The motion alleges that ARCP issued materially false and misleading financial statements by, among other things, overstating reported adjusted funds from operations, and then intentionally covering up their impropriety. In addition, it alleges that ARCP improperly accounted for various accruals and expenses that materially affected the company’s reported earnings per share. As a result of ARCP’s improper accounting and cover-up, key performance metrics were overstated and reported net losses for the reporting periods ending June 30, 2014 were understated. Revelation of this alleged accounting fraud by ARCP on October 28, 2014 resulted in losses in the company’s stock value of approximately $3 billion. STRS and OPERS lost in excess of $7.5 million as a result of the alleged fraud. 
The motion asks the court to consolidate several lawsuits against ARCP and to name the Ohio pension funds STRS and OPERS lead plaintiffs. 
"STRS Ohio looks forward to working once again with Attorney General DeWine and OPERS to protect the integrity of the financial markets," said Michael Nehf, Executive Director for STRS Ohio. 
“The OPERS Board of Trustees has been an active participant in securities litigation cases on behalf of our members and retirees,” said Karen Carraher, OPERS’ executive director. “This is a fiduciary responsibility that we take very seriously, and it is consistent with past actions we have taken to encourage corporate governance reform and to seek compensation for unlawful behavior. We intend to continue an aggressive posture to protect the integrity of the marketplace for all investors and citizens of Ohio.” 
The motion was made in the United States District Court for the Southern District of New York.
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