According to the law firm press release, the Complaint charges that Defendants made materially false and misleading statements, including they overstated non-controlling interests in calculating adjusted funds from operations, a key metric that measures the Company's earnings and cash flow.

On July 29, 2014, the Company disclosed that it had replaced its CFO and CAO after the Company's Audit Committee had identified financial statement errors in the release of first and second quarter 2014 financials. The Company's Audit Committee concluded that the Company incorrectly included certain amounts related to its non-controlling interests in its calculation of AFFO. Moreover, the Company revealed "that this error was identified but intentionally not corrected, and other AFFO and financial statement error was intentionally made." The Audit Committee also stated that it was investigating American Realty's fiscal 2013 Form 10-K for potential errors.

On this news, American Realty common stock traded as low as $7.85 per share on October 29, 2014, a decline in excess of $4.50 per share from the prior day's close.