Thompson REIT fires accountant for failure to report key events

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.”