On heels of Compass legal battle and dwindling stock, Realogy hit with securities fraud suit

Suit alleges that omissions led investors to purchase stocks at distorted prices

National /
Jul.July 12, 2019 10:45 AM
Realogy CEO Ryan Schneider (Credit: iStock)

Realogy CEO Ryan Schneider (Credit: iStock)

After suing a competitor over “illicit” business practices this week, real estate conglomerate Realogy is being accused of securities fraud.

The Rosen Law Firm on Thursday filed a federal lawsuit in the U.S. District Court of New Jersey against Realogy, its former CEO Richard Smith, current CEO Ryan Schneider, former CFO Anthony Hull and current interim CFO Timothy Gustavson, according to Inman.

According to the complaint, Realogy engaged in “anticompetitive” practices, making home sellers pay “inflated” buyer broker commissions.

Without that key information, investors purchased the stocks at off-kilter prices, the complaint alleges. The complaint further alleges that those actions could prompt the U.S. Department of Justice open a broader antitrust investigation of brokers’ commissions.

“Realogy believes the allegations in the complaint are without merit, and we intend to vigorously defend this action,” a spokesperson for Realogy told Inman.

As of late, broker commissions have come under scrutiny. In March, a complaint was filed against Realogy, HomeServices of America, RE/MAX and Keller Williams alleging conspiracy to force homesellers to pay buyer’s brokers commissions at inflated rates.

The latest lawsuit comes on the heels of Realogy’s own lawsuit against Compass this week, which alleges price-fixing and collusion, among other misdeeds.

Realogy stocks are now priced at less than a matcha latte — currently at $5.68 a share as of 10:30 a.m. Friday.

[Inman]— Georgia Kromrei


Related Articles

arrow_forward_ios
Redfin CEO Glenn Kelman, Compass CEO Robert Reffkin and eXp CEO Jason Gesing. (Getty, Redfin, eXp)
Compass, eXp rise in Real Trends’ annual brokerage rankings
Compass, eXp rise in Real Trends’ annual brokerage rankings
Realogy CEO Ryan Schneider
Realogy’s revenue hits $6.2B after housing rebound
Realogy’s revenue hits $6.2B after housing rebound
Compass CEO Robert Reffkin and Realogy CEO Ryan Schneider (Reffkin via Getty Images;/Illustration by Kevin Rebong for The Real Deal)
Compass accuses Realogy of lying, cheating and stealing
Compass accuses Realogy of lying, cheating and stealing
(Illustration by Kevin Rebong for The Real Deal)
Landlords increasingly turn to lawsuits against nonpaying retailers
Landlords increasingly turn to lawsuits against nonpaying retailers
RentPath CEO Marc Lefar and CoStar CEO Andy Florance (Credit: Getty Images)
RentPath calls off CoStar acquisition after FTC lawsuit
RentPath calls off CoStar acquisition after FTC lawsuit
Realogy CEO Ryan Schneider (iStock)
Realogy’s iBuying program expands after pausing in spring
Realogy’s iBuying program expands after pausing in spring
Realogy CEO Ryan Schneider and Compass CEO Robert Reffkin
Compass says it rejected Realogy’s offer to sell
Compass says it rejected Realogy’s offer to sell
Compass CEO Robert Reffkin and Realogy CEO Ryan Schneider
Compass created “dummy job” to avoid Realogy finance exec’s non-compete: judge
Compass created “dummy job” to avoid Realogy finance exec’s non-compete: judge
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...