Cantor Fitzgerald to hire nearly 30 RCS wholesalers

December 15, 2015

RCS was recently closed after paying Massachusetts $3 million to settle charges that it fraudulently rounded up proxy votes for real estate deals

Dec 11, 2015 @ 11:36 am

By Bruce Kelly

Renowned bond shop Cantor Fitzgerald & Co. is muscling its way into the nontraded real estate investment trust business and is hiring up to 28 former Realty Capital Securities wholesalers to lead the effort, according to two sources with knowledge of Cantor’s plans.

The former RCS wholesalers will be led at Cantor Fitzgerald by Steve Williams, who until recently was the senior vice president and sales manager in charge of the west for RCS, according to an RCS company presentation. According to his BrokerCheck report, Mr. Williams left RCS this month.

RCS primarily focused on marketing nontraded REITs sponsored and managed by Nicholas Schorsch’s AR Capital. RCS’s parent company, Realty Capital Corp., or RCAP, closed down the wholesaling unit and laid off 150 earlier this month after it was charged by the Massachusetts securities division with fraudulently rounding up proxy votes to support real estate deals sponsored by AR Capital. RCS Capital settled those charges by agreeing to pay the Massachusetts securities division $3 million.

(More: Massachusetts’ Galvin charges Realty Capital Securities with proxy vote fraud)

RCS was once a cornerstone of Mr. Schorsch’s now decimated nontraded REIT empire, which at its height just a few years ago raised hundreds of millions of dollars per month in equity from mom-and-pop investors who bought Mr. Schorsch’s REITs.

A spokeswoman for Cantor Fitzgerald, Karen Laureano-Rikardsen, did not immediately respond to a request for comment.

Cantor Fitzgerald currently does not sponsor or manage any nontraded REITs, but may do so in the future. It most recently sold a real estate private placement known as a Delaware statutory trust through advisers affiliated with independent broker-dealers and is considering offering a mortgage REIT, as well as an interval fund, according to a source.

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Gil Armour, CFP
February 3, 2016

I have been using Blue Vault Partners for the past five years.  I have found them to be a valuable, unbiased resource when it comes to evaluating and comparing non-traded REITs.  The reports help me analyze which sponsors are doing a responsible job of managing their offerings.  This allows me to limit my REIT recommendations to only the most competitive products, and then track those REITs throughout their life cycle.