Corporate corruption in Ma$$achu$etts?
"Galvin alleges corporate-voting fraud at Realty Capital Securities" by Jack Newsham Globe Correspondent November 12, 2015
Massachusetts finance regulators have charged Boston-based Realty Capital Securities LLC with proxy voter fraud, alleging that agents impersonated shareholders to use their stocks to vote on important questions of corporate governance.
What questions? That's what our government has become, and it $ucks.
Secretary of State William Galvin’s office said agents of Realty Capital Securities impersonated shareholders of New York-based Business Development Corp. of America in June and September to get votes passed to benefit New York investors Nicholas Schorsch and William Kahane, who indirectly controlled Realty Capital Securities. The regulator’s complaint asks for Realty Capital Securities to be stripped of its broker-dealer license and pay a fine.
“They corrupted the [proxy voting] process and they cannot be allowed to do business in Massachusetts,” Galvin said in an interview. “We think this went all the way to the top.”
As for the elections he oversees and runs in....
Realty Capital Securities is a Delaware-registered subsidiary of New York-based RCS Capital Corp. with offices in Boston. It is part of a network of real estate companies controlled by Schorsch and Kahane, Galvin’s office said. One of the proxy votes allegedly affected by fraud was necessary for a proposed $378 million deal involving Schorch’s companies, and another would have given Schorsch and Kahane more control over Business Development Corp. of America and deprived “mom-and-pop investors” of their rights, Galvin said.
Schorsch stepped down from the management of his main real estate company in the wake of an accounting scandal last year that caused its stock and that of affiliated companies including RCS Capital Corp. to decline sharply, according to a September article in Investment News. His companies are also under investigation by several federal authorities, the publication reported. Realty Capital Securities’s main business is selling non-traded real estate securities to financial advisers, the article said.
Galvin said some of the behavior seemed criminal, and his office could refer cases to prosecutors. The secretary of state can seek only civil penalties.
Workers at Retail Capital Securities also faced “intense pressure” to whip up proxy votes for investment funds affiliated with Schorsch and Kahane, backed by “thinly veiled threats” that they would be fired if they didn’t succeed, Galvin’s complaint alleges. Proxy votes for the BDCA measures could be cast online, by e-mail, or through a phone call, and three Realty Capital Securities employees allegedly cast votes by phone and used foreign accents to imitate shareholders.
The investigation started after a Realty Capital Securities employee tipped regulators, and the anonymous employee is extensively cited in Galvin’s complaint. An employee who took part in the alleged fraud declined to be interviewed by regulators, citing his right against self-incrimination, the complaint said.
Galvin’s office said its administrative complaint centered on two instances, but regulators believe “numerous” instances of proxy voter fraud occurred.
A spokesman for RCS Capital Corp. did not immediately respond to a request for comment.
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