“Following a recommendation by our due diligence committee, and with the best interests of advisors in mind, we have temporarily suspended sales in three Cole products with the expectation there will be more clarity in the coming weeks,” the IBD said in a statement Thursday shared with ThinkAdvisor.
Cambridge has some 2,500 affiliated independent reps.
On Wednesday, Cetera Financial Group — part of RCS Capital, of which Nicholas Schorsch is chairman — asked its affiliated advisors to suspend sales of three Cole nontraded REITs. Other IBDs that have suspended these and other ARCP product sales include LPL Financial (LPLA), AIG-owned Advisor Group, Ladenburg Thalmann (LTS)-owned Securities America and National Planning Holdings.
Last week, ARCP revealed that it had overstated adjusted funds from operations — a measure of REIT cash flow — and understated a net loss for both the first quarter and first half of the year. American Realty says it will reduce its adjusted FFO by $12 million for the first quarter and $10.9 million for the three months ended in June.