RCS Capital Corp. is in danger of having its stock delisted from the
New York Stock Exchange.
The Big Board notified RCS Capital, or RCAP, on Tuesday that its common stock did not meet the NYSE's standards for continued listing; the NYSE requires that the average closing price per share of a listed company be above $1 per share for a consecutive 30-trading-day period. Last week RCAP failed to meet that standard, according to a company statement. Its shares were trading at 51 cents in mid-day trading Thursday.
Under NYSE rules, RCAP has six months to gets its price per share above $1, according to the statement. “The company intends to notify the NYSE that it anticipates that this deficiency will be cured and that it will return to compliance with the NYSE continued listing standard,” RCAP said.
Andrew Backman, a spokesman for RCAP, which operates a wholesale brokerage, Realty Capital Securities, and a retail broker-dealer, Cetera Financial Group, was not immediately available to comment. RCAP was founded by real estate investor Nicholas Schorsch, who remains a principal shareholder.
GALVIN CHARGES
Separately, Massachusetts securities regulator William Galvin on Thursday
charged Realty Capital with fraudulent rounding up of proxy votes to support alternative investments sponsored by AR Capital, a real estate management company owned by Mr. Schorsch and William Kahane.
In an administrative complaint, Mr. Galvin said agents of RCS impersonated shareholders and cast fake votes for investment programs sponsored by AR Capital.
Mr. Galvin is seeking to revoke RCS' broker-dealer registration in the state, impose a cease-and-desist order and levy a fine. His office confirmed that Thursday charges are part of an ongoing investigation into RCAP.
On Monday, Apollo Capital Management and AR Capital, Mr. Schorsch's private real estate management company, said they were
calling off an earlier announced transaction in which Apollo would have bought a majority stake in AR Capital for $378 million. RCAP said it was selling RCS to Apollo for $6 million in cash, an amount less than the $25 million announced earlier.
Later that day, Cetera Financial's CEO Larry Roth told advisers on a conference call that the
brokerage network has half a dozen potential investors kicking its tires and will have a new owner or significant
private equity investor by year end.
On Wednesday, RCAP said it
expects to post a third-quarter loss of more than $300 million due to a $331.7 million impairment, or write-down of goodwill and intangible assets.
