The Real Deal New York

State investigates Roger Erickson, top Sotheby’s broker, over claims he acted as a ‘dual agent’

Complainant says agent put buyers’ interest first in $3M Fifth Avenue sale
By Katherine Clarke | September 19, 2012 12:30PM

The state is investigating claims that Sotheby’s International Realty star broker Roger Erickson acted as an undisclosed dual agent in the sale of an apartment at 812 Fifth Avenue, sources told The Real Deal.

Erickson, consistently one of Sotheby’s top-ranking brokers during his career at the firm, is alleged to have misled his client Harvey Schuyler into believing he was acting as Schuyler’s exclusive representative in the 2009 sale of the Fifth Avenue residence, when in fact he was also working with a prospective purchaser, Turkish businesswoman Demet Sabanci Cetindogan. Schuyler filed suit against Erickson and Sotheby’s in Supreme Court earlier this year. A decision on the case is still pending.

Sources said the case has drawn attention from the New York State Department of State’s Division of Licensing Services, which has launched an investigation into Erickson’s conduct. A spokesperson for the department confirmed an investigation was pending but declined to comment further.

Erickson and Sotheby’s denied the allegations in a joint statement to The Real Deal: “We believe this complaint has no merit and we’re confident that the Department of State will come to the same conclusion,” the company said.

According to the complaint, Schulyer retained Erickson in December 2008 to sell his apartment, which was initially priced at $3.65 million. However, when Cetindogan produced a $3 million offer for the co-op unit in February 2009, Erickson “vigorously” promoted it. Centindogan eventually went into contract on the spread.

“Erickson put enormous pressure on plaintiff to accept the offer through aggressive tactics, deception and sheer dishonesty,” the complaint, filed by Evan Schieber of the law firm Rivkin Radler, stated. “Erickson advised plaintiff that, although two months earlier he believed the apartment to be a ‘give away’ worth a minimum of $3.65 million, that the market now had softened substantially (although, in fact, it was actually in the process of recovering) and he used high-pressure tactics on the plaintiff to accept the purchaser’s offer. However, completely unknown to the plaintiff, Erickson had become, surreptitiously, a dual agent working simultaneously to promote the purchaser’s interests over the plaintiff’s.”

The deal for the apartment ultimately fell through after Centindogan flunked the co-op board interview. (Centindogan sued Shuyler last year to get her deposit back and won. Shuyler later appealed, claiming the businesswoman had purposely fudged the interview to get her deposit back. A judge ruled in favor of Schuyler.) Schuyler has since sold the apartment to another couple for $3 million.

Still, the complaint stated that Erickson’s alleged misconduct caused Schuyler to have to take a hit on the eventual sale of the apartment. “Having set the apartment’s purchase price below the fair market value, created a false market,” it reads. “Plaintiff thereafter was unable to realize a higher market value for the apartment as the false market price was widely known.”

In an interview with The Real Deal, Schieber said that had his client known that Erickson was acting on behalf of the would-be buyer, “he would never have accepted[Centindogan].”

In 2010, Erickson ranked as Sotheby’s number one broker in Manhattan. He has closed sales in excess of $1 billion over the last 20 years and has consistently ranked as one of the nation’s top real estate professionals in a widely recognized ranking by REAL Trends. Having spent his early career working as a music executive at CBS Records, he has worked with some of the music industry’s biggest celebrities, including Bono and Madonna.

Just last month, Erickson represented the seller and buyer in a $21 million deal at the Verona on East 64th Street. The buyer was Himmel + Meringoff Properties principal Stephen Meringoff.

Sources said the state’s investigation should be concluded by the end of the month. A spokesperson for the Department of State said a broker under investigation is entitled to work until the point when his or her broker’s license is revoked by the Department’s administrative judicial process.