VEREIT, a publicly traded real estate investment trust, will pay an $8 million penalty to resolve Securities and Exchange Commission fraud charges over intentionally overstating a key non-GAAP performance metric. The settlement also includes a cease-and-desist order.
VEREIT was formerly known as American Realty Capital Properties (ARCP). The SEC’s order finds that former senior company executives at ARCP falsely reported and manipulated the calculation of the company’s adjusted funds from operations (AFFO), a non-GAAP metric relied upon by management, investors, and analysts to assess ARCP’s financial performance. The scheme took place from at least May 2014 until the company’s initial disclosure of the misconduct on Oct. 29, 2014, according to the SEC.
