U.S. prosecutors drop accounting fraud case against ex-Brixmor executives By Reuters

<iframe src=”//rcm-na.amazon-adsystem.com/e/cm?o=1&p=22&l=ur1&category=homegarden&banner=02NMTC702K4D0VHE1SR2&f=ifr&linkID=17e0b4ac3a719000706e772761d8ae0e&t=forexz-20&tracking_id=forexz-20″ width=”250″ height=”250″ scrolling=”no” border=”0″ marginwidth=”0″ style=”border:none;” frameborder=”0″></iframe>

© Reuters. bFILE PHOTO: Carroll, CEO of Brixmor Property Group awaits the company’s IPO on the floor of the New York Stock Exchange

By Nate Raymond

(Reuters) – U.S. prosecutors are dropping accounting fraud charges against the former chief executive officer and onetime chief financial officer of Brixmor Property (NYSE:) Group Inc, who were accused of manipulating a key financial metric for the large shopping center owner and operator.

Federal prosecutors in Manhattan in a court filing said they concluded based on new information that they could not prove their case against former CEO Michael Carroll and ex-CFO Michael Pappagallo, prompting a judge to dismiss the case on Thursday.

That information concerned “particular accounting adjustments that form a significant portion of the allegedly misstated metric charged in the indictment,” prosecutors said.

Prosecutors also dropped charges against two former executives who had pleaded guilty, Steven Splain and Michael Mortimer.

“We are pleased that the government now agrees with what we have said from the beginning: this prosecution should never have been brought,” said Victor Hou, a lawyer for Carroll at Cleary Gottlieb Steen & Hamilton.

Gregory Kehoe, Pappagallo’s attorney at Greenberg Traurig, said he appreciated the decision by U.S. Attorney Audrey Strauss’ office to take the “extraordinary” and “rare” step to dismiss the case.

The U.S. Securities and Exchange Commission said it is evaluating dismissing a related civil case.

A spokesman for Strauss declined to comment.

Brixmor, a New York-based real estate investment trust (REIT) with about 421 shopping centers, agreed in 2019 to pay a $7 million fine to resolve SEC charges, without admitting wrongdoing.

Investigators began examining Brixmor in February 2016 after the REIT said it had uncovered “smoothing” in same property net operating income (SP-NOI), a measure for investors of a REIT’s financial performance.

Prosecutors said Carroll and Pappagallo falsely touted the consistency of Brixmor’s SP-NOI growth rate, with Carroll describing it at an industry conference as the REIT’s “secret sauce,” when in fact the rate fluctuated significantly.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Be the first to comment

Leave a Reply

Your email address will not be published.


*