Rich Uncles' auditor charged with accounting fraud by SEC

January 29, 2018

This, on top of SEC investigation for marketing fraud, adds to embattled platform's woes. Now, a new Wall Street Journal article alleges Rich Uncles REIT's cash flow was plumped up after recent accounting change.

 

 

 

 

(Disclaimer: I'm not a financial advisor or attorney. Consult your own financial and/or legal advisors before making any investment or legal decisions.)

 

The auditor of Rich Uncles, Anton & Chia, has been charged by the SEC for auditing fraud on behalf of 3 of their clients.  

 

The SEC’s Enforcement Division alleges that Anton & Chia LLP and its accountants ignored numerous indications of fraudulent financial reporting by three of the firm’s audit clients – microcap companies Accelera Innovations Inc., Premier Holding Corp., and CannaVEST Corp.  For example, Accelera’s public filings allegedly included revenue, assets, and liabilities from an entirely different company.  The Enforcement Division alleges that instead of standing in the way of Accelera’s fraud, Anton & Chia facilitated it. 

 

This news may cause some investors to question whether the accounting firm did this for other clients as well.

 

These allegations come at a challenging time for Rich Uncles. In our yearly review, we discussed how the SEC has been investigating the company over alleged undisclosed marketing improprieties. Rich Uncles disclosed in their public filings that this could have material negative effects on the company. 

 

Then, two days ago, an investor mentioned in a Wall Street Journal article alleged that Rich Uncles changed its accounting in a way that "makes its business look more robust and its dividend safer."

 

John Davis, CFO at Rich Uncles, countered that "the change had no impact on the REIT’s cash or net income."

 

But, Howard Schilit, founder of a New York accounting-analysis and forensics firm, disagreed. Per the Wall Street Journal, he alleged that "the accounting change does seem to have had the effect of making Rich Uncles’ operating and free cash flows appear larger."

 

All of this controversy may make investors second-guess investing with the company.

 

At one time, Rich Uncles was a top-ranked platform in the reviews, due to their transparency and willingness to answer all questions. However, since the SEC investigation, the company has refused to answer even our non-SEC-related questions

Please reload

About Ian Ippolito

Ian Ippolito is an investor and serial entrepreneur. He has been interviewed by the Wall Street Journal, Business Week, Forbes, TIME, Fast Company, TechCrunch, CBS News, FOX News and more.

 

Ian was impressed by the potential of real estate crowdfunding, but frustrated by the lack of quality site reviews and investment analysis. He created The Real Estate Crowdfunding Review to fill that gap.

More information
join our mailing list

Related Articles

Please reload

Most Recent Articles

October 8, 2019

What's normal and what's out of line? Are there times when I should be willing to pay more? This article explains how I evaluate these things.

(Usual disclaimer: I'm just an investor expressing my personal opinion and not a financial advisor, attorney or accountant. Con...

June 13, 2019

Comprehensive review of Equity Multiple, extension to  club feeder and latest news on Prodigy Network, etc.

(Usual disclaimer: I'm just an investor expressing my personal opinion and not a financial advisor, attorney or accountant. Consult your own financ...

May 29, 2019

Investors allege a 40% loss on 84 William Street deal (and being asked to pony-up $9.3 million more to avoid a 100% loss). This, after other problematic deals and allegations that Prodigy misappropriated $2.5 million of investor money and is allegedly "broke"...
 

Capti...

May 20, 2019

Comprehensive review of Broadstone Real Estate Access (BDREX), updated non-accredited guide to choosing funds, new feeder and latest news.

(Usual disclaimer: I'm just an investor expressing my personal opinion and not a financial advisor, attorney or accountant. Consult...

May 15, 2019

A step-by-step guide for the every-day, non-accredited investor.

(Usual disclaimer: I'm an investor and not a financial advisor or attorney. Consult your own financial professional before making any financial decisions. Everything on this site is my personal opinion on...

Please reload

Older Articles
  • White Facebook Icon
  • White Twitter Icon
  • White Google+ Icon

© 2015-2018 By Exhedra Solutions, Inc. All rights reserved. Use of this site constitutes your acceptance of it's terms and conditions.
 

Code of Ethics: I do not receive any money from any sponsor or platform for anything including guides, tutorials, postings, reviews, referring investors, affiliate leads or advertising. Nor do I negotiate special terms for myself above what I negotiate for the benefit of members. For clarity: I do receive monetary compensation in 2 ways. Site members can send donations (and a $200 donation entitles them to access my personal low-level due diligence notes on investments I've put money into). And if the club chooses to create a feeder, I take a fee as manager (and keep the excess beyond expenses). Additionally I receive the same non-monetary compensation all club members do: access to otherwise inaccessible sponsors, millions of dollars of special deals and discounts, the satisfaction of giving back and helping others, and more.

We are just investors expressing our opinion, and are not licensed financial advisors, nor attorneys nor accountants. Always consult with your own licensed professional before making any investment decision. All information provided is personal opinion only, and does not constitute professional, financial, tax, legal or other advice.