TNP REIT Fires Accounting Firm; CEO's Reliability Called into Question

The co-chief executive and chairman of the board of the $300 million TNP Strategic Retail Trust Inc., Tony Thompson, who has given himself the nickname “The Truth,” is currently facing an investigation by the Financial Industry Regulatory Authority Inc. (FINRA) for failing to turn over documents requested by FINRA, and the real estate investment trust last month eliminating its dividend writes Bruce Kelly for InvestmentNews.

In a filing April 18th. with the Securities and Exchange Commission, the REIT said it fired its independent certified accounting firm, McGladrey LLP, on April 15. The accountant did not file last year with the SEC two “reportable events,” both of which stem directly from Mr. Thompson's role and work with the REIT.

McGladrey notified the REIT last August “that it would no longer be able rely upon the representations of” Mr. Thompson, according to the filing. That statement stemmed from an reportable event during the second quarter of last year, when “the company's management and McGladrey identified a significant deficiency in the company's internal control over financial reports,” according to the filing. The deficiencies were related to the REIT making prepayments of acquisition and financing fees to its adviser, TNP Strategic Retail Advisors LLC, which is controlled by Mr. Thompson, writes Kelly.

A review of SEC filings from that period shows that McGladrey did not report either event.

“All filings have been made on time and speak for themselves,” writes Thompson in a series of emails to InvestmentNews. “The truth is the [fusion_builder_container hundred_percent="yes" overflow="visible"][fusion_builder_row][fusion_builder_column type="1_1" background_position="left top" background_color="" border_size="" border_color="" border_style="solid" spacing="yes" background_image="" background_repeat="no-repeat" padding="" margin_top="0px" margin_bottom="0px" class="" id="" animation_type="" animation_speed="0.3" animation_direction="left" hide_on_mobile="no" center_content="no" min_height="none"][REIT's] audit committee dismissed McGladrey. That is the story.”

Thompson also responded: “Your conclusion is wrong. Read the filings from June 2012 to date and then ask the audit committee chair who makes these decisions, [including] why they 'dismissed' the auditor and if there is any dispute. [You are] barking up the wrong tree.”

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