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Practice Management > Building Your Business

Roth Quits RCS Capital Board

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Larry Roth, head of Cetera Financial Group, has resigned from the RCS Capital (RCAP) board of directors, the firm said Monday. Roth stepped down along with Peter M. Budko, who is part of a company being created by RCAP and Apollo Global.

“Neither Messrs. Roth nor Budko resigned as a result of any disagreement with RCS Capital or its board of directors,” RCS explained in a statement.

Instead, the company says, Roth will “concentrate his energies on his responsibilities as chief executive officer of Cetera Financial Group,” which includes more than 9,000 independent advisors and several independent broker-dealers, such as First Allied. Budko will focus on his responsibilities “in connection with the recently announced creation of AR Global Investments,” which distributes alternative investments.

RCAP stock has been battered during the recent market mayhem. It now trades near $1.90, after falling nearly 6% on Tuesday.

In August, RCS Capital said it planned to sell its troubled wholesale distribution unit to Apollo Global Management (APO) for $25 million and forming AR Global Investments. It also reported a 65% year-over-year drop in its sales of alternative products for the second quarter of 2015.

Last year, American Realty Capital Properties (ARCP) reported $23 million of accounting errors, and at the time, the founder of ARCP and RCAP– Nicholas Schorsch – was executive chairman of both entities. RCAP distributes ARCP products, which have included nontraded REITs.

The accounting errors, in part, prompted RCAP to renege on its planned purchase of ARCP’s Cole Capital business for $700 million, and ARCP then moved to sue its investment partner. These developments prompted many broker-dealers to halt their sales agreements with RCAP.

Recently, ARCP rebranded itself as VEREIT (VER).

The RCS Capital board of directors now includes the following seven directors:

  • Mark Auerbach, non-executive chairman, and a director of Optimer Pharmaceuticals; from 1993 to 2005, he was CFO of Central Lewmar, a paper distributor.
  • Michael Weil, CEO of RCS Capital, who formerly served as president of American Realty Capital Properties and executive vice president of AR Capital.
  • Jeffrey J. Brown, CEO and founding member of Brown Equity Partners.
  • Doug Wood, founder of Integrated Capital Services and Wood Logan Associates; he served as chairman of the latter group until 2011.
  • C. Thomas McMillen, Washington Capital Advisor’s CEO and chairman since 2002.
  • Marc Rowan, a senior managing director and director of Apollo Global Management and a managing partner of Apollo Management, which he co-founded in 1990.
  • Anthony Civale, a lead partner and chief operating officer of Apollo Capital Management, Apollo’s credit business.


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