The Real Deal National

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
July 12, 2019 10:45AM

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