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W.P. Carey Settles With SEC For $30 Million

WASHINGTON (CN) - W.P. Carey & Co. and two of its senior executives secretly paid nearly $10 million to induce a brokerage firm to push Carey's real estate investment trusts, the SEC said in settling accusations of securities fraud.

CFO John J. Park and Chief Accounting Officer Claude Fernandez approved the illegal payments and "went to great lengths to conceal" them, including requesting sham invoices from the broker-dealer, the SEC said.

The secret payoffs were illegal in themselves, and increased the management and other fees that Carey received from the REITs, the SEC says.

To settle the securities fraud charges, Carey agreed to disgorge $20 million and pay $10 million in fines, the SEC said. Park was fined $240,000 and barred for 5 years from serving as an officer in a public company. Fernandez was fined $75,000 and may not appear before the SEC as an accountant for 2 years.

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