Larry Roth, most recently head of Cetera Financial Group, has been elected chief executive of Cetera's parent company, RCS Capital Corp., replacing Michael Weil, a longtime business partner of Nicholas Schorsch, one of the controlling shareholders of RCAP.
As CEO of Cetera, Mr. Roth was in charge of a retail brokerage network of 9,500 financial advisers and registered reps. Mr. Weil will remain on RCAP's board of directors.
Mr. Roth is taking the helm of a company in distress. RCAP's share price has been in a free fall over the past 12 months due to a flood of negative developments.
Just last week, Massachusetts
charged agents of Realty Capital Securities, a wholesaling division of RCAP, with impersonating shareholders and casting fake proxy votes;
Apollo Global Management reduced its purchase price of Realty Capital Securities to $6 million from the original $25 million; and the New York Stock Exchange
warned RCAP that its stock had declined so much it was in danger of being delisted.
(More: Nicholas Schorsch's RCAP gets scorched on multiple fronts)
Tuesday morning, RCAP shares were trading at 30 cents, down 97.6% over the past year.
Mr. Roth is no stranger to tumult. He was CEO of the AIG Advisor Group network of broker-dealers in September 2008 when its parent company, American International Group Inc., was facing bankruptcy and was bailed out by the federal government. That caused some advisers to leave those broker-dealers because of the association with the failed insurance giant, one of the most vilified financial institutions of the financial crisis.
(More: CEO Roth to advisers: Cetera has six potential suitors)
As expected, RCAP announced significant financial losses in its
earnings report, which was released late Monday.
RCAP reported a net loss to its common stock holders of $306.8 million for the quarter that ended in September compared to a net loss of $37 million for the same quarter in 2014. The most recent loss included a $331.7 million impairment, or write-down, of goodwill and intangible assets.
