Thompson REIT fires accountant for failure to report key events

CEO Tony Thompson's reliability called into question for second time this month.
JUN 10, 2013
For the second time this month, business associates of noted real estate investor Tony Thompson have said publicly that he is not a reliable source of information. Mr. Thompson, who has given himself the nickname “The Truth,” is the co-chief executive and chairman of the board of the $300 million TNP Strategic Retail Trust Inc. He is currently facing an investigation by the Financial Industry Regulatory Authority Inc. for failing to turn over documents requested by Finra, and the real estate investment trust last month eliminated its dividend. In a filing yesterday with the Securities and Exchange Commission, the REIT said it fired its independent certified accounting firm, McGladrey LLP, on April 15. The accountant did not file last year with the SEC two “reportable events,” both of which stem directly from Mr. Thompson's role and work with the REIT. McGladrey notified the REIT last August “that it would no longer be able rely upon the representations of” Mr. Thompson, according to the filing. That statement stemmed from an reportable event during the second quarter of last year, when “the company's management and McGladrey identified a significant deficiency in the company's internal control over financial reports,” according to the filing. Those deficiencies were related to the REIT making prepayments of acquisition and financing fees to its adviser, TNP Strategic Retail Advisors LLC, which is controlled by Mr. Thompson. A review of SEC filings from that period shows that McGladrey did not report either event. This is the second time in April that businesspeople close to Mr. Thompson have called into question his version of events related to the REIT. Earlier this month, the REIT's three independent directors said TNP Strategic Retail Advisors, controlled by Mr. Thompson, “misled the board of directors with respect to” certain loans and acquisitions, according to a separate SEC filing. A spokeswoman for McGladrey, Terri Andrews, said the company does not comment on client-related issues. In a series of e-mails to InvestmentNews today, Mr. Thompson brushed aside questions about McGladrey's statement that it could not rely on his accounts. “All filings have been made on time and speak for themselves,” he wrote. “The truth is the [REIT's] audit committee dismissed McGladrey. That is the story.” When pressed, Mr. Thompson responded: “Your conclusion is wrong. Read the filings from June 2012 to date and then ask the audit committee chair who makes these decisions, [including] why they 'dismissed' the auditor and if there is any dispute. [You are] barking up the wrong tree.”

Latest News

SEC to lose Hester Peirce, deepening a commissioner crisis
SEC to lose Hester Peirce, deepening a commissioner crisis

The "Crypto Mom" departure would leave the SEC commission with just two members and no Democratic commissioners on the panel.

Florida B-D, RIA owner pitches bold long-term plan to sell to advisors
Florida B-D, RIA owner pitches bold long-term plan to sell to advisors

IFP Securities’ owner, Bill Hamm, has a long-term plan for the firm and its 279 financial advisors.

Fintech bytes: Vanilla, Wealth.com forge new estate planning partnerships
Fintech bytes: Vanilla, Wealth.com forge new estate planning partnerships

Meanwhile, a Osaic and Envestnet ink a new adaptive wealthtech partnership to better support the firm's 10,000-plus advisors, and RIA-focused VastAdvisor unveils native integrations with leading CRMs.

Fiduciary failure: Ex-advisor who sold practice fined after clients lost millions
Fiduciary failure: Ex-advisor who sold practice fined after clients lost millions

A former Alabama investment advisor and ex-Kestra rep has been permanently barred and penalized after clients he promised to protect got caught in a $2.6 million fraud.

Why the evolution of ETFs is changing the due diligence equation
Why the evolution of ETFs is changing the due diligence equation

As more active strategies get packaged into the ETF wrapper, advisors and investors have to look beyond expense ratios as the benchmark for value.

SPONSORED Are hedge funds the missing ingredient?

Wellington explores how multi strategy hedge funds may enhance diversification

SPONSORED Beyond wealth management: Why the future of advice is becoming more human

As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management