Point72 Took RCS Capital Stake as Regulatory Inquires Disclosed

Point72 Asset Management said it took a 5.1% passive stake in RCS, which operates broker-dealers, in a Nov. 14 regulatory filing.

RCS said it’s in contact with the SEC and FINRA as part of its regular operations. The company “and its subsidiaries have continued to respond to on-going verbal inquiries, requests for correspondence, information and discussions” with regulators, including with respect to the ARCP disclosure, RCS said in a quarterly report filed with regulators Nov. 14.

RCS’s shares have fallen 38% since ARCP disclosed accounting mistakes last month, partly because of concern over damage to its business selling nontraded real estate investment trusts sponsored by AR Capital. That company was created by Nicholas Schorsch, RCS’s chairman and biggest shareholder, and chairman of American Realty Capital Properties as well.

Brokerage firms including LPL Financial have said they were suspending sales of some products tied to the New York-based companies.

RCS has sought to distance itself from accounting errors at ARCP. Some brokers have lifted suspensions on investment products RCS sells, and the company expects most of the others will be reinstated by the end of the year, Michael Weil, the company’s chief executive officer, said on a Nov. 13 conference call.

Read more:

• RCS Receives Regulatory Inquiries After ARCP Accounting Errors
• 3 Most Interesting Takeaways From RCS Conference Call
• Schorsch Plays Defense at Schwab Amid Turmoil in His Empire