Viceroy Research issues cautious research report on Arbor Realty

Viceroy Research calls Arbor Realty Trust a “fraud,” saying in a new research note that its investigations have discovered “an elaborate and intentional con,” where Arbor has financed purchases of assets from its own foreclosures, with Arbor loans, via off-balance sheet entities run by former Arbor associates, and entirely financed with Arbor equity capital. According to Viceroy, Arbor financed 99% of the “non-controlling interest” equity of an off-balance sheet entity run by a former VP of Arbor, whose investment in the entity was also financed by Arbor. Viceroy adds that Arbor has “fraudulently” overstated the value of its loan book through undisclosed, off-balance sheet, related party transactions.