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Realty Capital agrees to shut down, pay $3 million fine

Realty Capital Securities of Boston has agreed to shut down its business and pay a $3 million fine to settle fraud charges with Secretary of State William F. Galvin.

Galvin’s office had accused the company last month of proxy voter fraud, alleging that Realty Capital’s agents impersonated shareholders to use their stocks to vote on matters to benefit itself.

The Massachusetts Securities Division, overseen by Galvin, alleged in an administrative complaint that agents of the firm used other shareholders’ proxy votes in favor of management proposals at shareholder meetings of Business Development Corp. of America, an investment program sponsored by American Realty Capital.

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American Realty, an affiliate of New York-based RCS Capital Corp., is own by Nicholas S. Schorsch and William M. Kahane, Galvin said. Andrew Backman, a spokesman for RCS Capital, said in a statement, “RCS is pleased to confirm it has reached a mutually acceptable resolution with the Massachusetts Securities Division regarding the Division’s administrative complaint in connection with RCS’s shareholder proxy solicitation process. We are pleased that this matter has been resolved in an efficient and timely manner.”

Galvin said the company would give up its Massachusetts registration by the end of the week and will later end its registration nationwide.


Beth Healy can be reached at beth.healy@globe.com. Follow her on Twitter @HealyBeth.