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.

  • Piedaterre

    Listed by Brown Harris Stevens at $4,950,000.
    Price decreased by 9% to $4,500,000.
    Listing entered contract.
    Price decreased by 11% to $3,999,000.
    Listing is no longer available.
    Later Listed by Sotheby’s International Realty, Inc. at $3,650,000.
    Sotheby’s International Realty, Inc. Listing is no longer available. Last priced at $3,450,000.
    Later Listed by Stribling at $3,450,000.
    Stribling Listing sold.
    Sale recorded for $3,000,000.

  • Raging Realtor

    Case dismissed.

  • ann

    the case should not be dismissed but I do not believe the DOS has the knowledge to let him face what he needs to face. This double dealing has to stop. Double dealing makes it difficult for honest brokers to earn a living. Erickson should be fined and his licenses suspended and he should be made to return any commissions he earned and also if there was another broker that he shoosho as he has a habit of doing he should pay the price.

  • ann

    He has a habit of claiming that he has a higher offer or that the seller will not accept the offer and he has a habit of pricing the property way out of the real value of the property. This is the kind of behavior that makes real estate brokers rank lower than a used car salesman.

  • ann

    If he put a buyers interest first it was not because he was interested in the buyer. It is because he thought helping that buyer would get him referrals to other high priced buyers. He was being dishonest.

  • ann

    could not be happening to a nicer guy.

  • ann

    brokers must reveal that they are representing both sides of the deal. that is the law and is well written in Article 12A all you have to do is google the Dual Agency rules under DOS. He apparently did not tell the seller that he is repping the buyer as well but simply said that he had a buyer. that is intentionally misleading and is dishonest and deceptive. A broker can rep both sides of the deal but musl reveal that they are repping boths sides of the deal. It seems he did not do that and therefore he must pay the price so that this undisclosed double dealing stops and the buyer will bring their own broker. Greed is not a good thing.

  • brooklynbroker

    based on what the article says I don’t see the dual broker evidence. Maybe there is more than was written here. Also based on the street easy list of how the price descended it seem like it was the right price for the unit. Additionally 20008-9 was a tough time to sell RE since everyone was scared to buy and were renting in droves. Market is recovering now.

    DOS has a duty to pursue but I see a dismissal.

  • Joseph Palladino

    Fred Williams is the most honest professional
    there is.

    Anyone contemplating a purchase of this magnitude
    Should contact him at Sotheby’s