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Carey Broker-Dealer Receives Subpoena From SEC

NEW YORK CITY-WP Carey & Co. and its broker-deal subsidiary, Carey Financial, say they are full cooperating with the SEC in this matter.

By Michelle Napoli | Updated on August 11, 2004

NEW YORK CITY-Company executives aren’t talking. But WP Carey & Co., a significant sale-leaseback investor and asset manager on behalf of its non-traded REITs, disclosed in its most recent quarterly report that it and its Carey Financial Corp. broker-dealer subsidiary received subpoenas from the Securities and Exchange Commission in June.

“The company has commenced providing information in response to the subpoenas,” WP Carey said in its quarterly filing. The allegations involved were discussed in more detail in the company’s 2003 annual report, filed on March 15. The allegations as characterized in that filing, and what response Carey included in the filing, are:•That shares in a second offering for the Corporate Property Associates 15 Inc. were sold before their registration became effective. Carey stated that “pending effectiveness of the registration statement investor funds were delivered into escrow and not CPA:15 or Carey Financial.”

•That the prospectus for the first offering “contained material misstatements and omissions because that prospectus did not disclose that the proceeds of the Phase I offering would be used to advance commissions and expenses payable with respect to the Phase II offering.” Carey said that “Carey Financial has reimbursed CPA:15 for the interest cost of advancing the commissions that were later recovered from the Phase II offering proceeds.”

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