The New York City-based law firm that previously filed a class action lawsuit against Zillow is putting Realogy in its crosshairs.
Rosen Law Firm, a global investor-rights law firm, announced on June 12 in a press release that it’s preparing a class action lawsuit against Realogy over allegations the real estate holding company defrauded investors by failing to disclose an alleged investigation into the company by the U.S. Department of Justice.
“It is not uncommon when a company sees a meaningful movement in its stock price for law firms to start looking for clients for securities litigation,” Trey Sarten, Realogy’s vice president of external communications, told Inman. “To date, no action tied to the dip in our stock price has been filed, and we believe that the allegations in the advertisement are without merit.”
“As a general matter, we do not comment on the accuracy of attorney advertising or on rumors or speculation,” Sarten added. “That said, Realogy takes its disclosure obligations seriously, and if something material were to happen at the company, we would publicly disclose it at the appropriate time.”
On May 21, 2019, Inman reported that the U.S. Department of Justice had requested information on multiple listing service data from CoreLogic, a California-based financial services and analytics firm. CoreLogic, at the time, told Inman it was not the focus of the investigation.
It’s not clear from the letter, which entities were targeted by the investigation, which made broad demands of CoreLogic to turn over a bevy of information, including all documents relating to any members’ ability to search based on compensation offered by listing brokers to buyers’ brokers. It also requested documents related to any policy or language governing the licensing of MLS data, policies relating to data protection and destruction and datasets on the frequency of searches.
But according to Rosen Law Firm, it was reported that, “the U.S. Department of Justice is investigating Realogy for potential anti-competitive practices related to residential real estate brokerage, focusing primarily on broker compensation and listing restrictions.”
A spokesperson for the firm declined to comment when asked where it was reported that DOJ was investigating Realogy, specifically.
“On this news, Realogy’s stock price fell $0.71 per share, more than 9 percent, over the next two trading days, to close at $7.13 per share on May 23, 2019,” Rosen Law Firm said in a release.
Realogy’s stock has suffered in recent months, hovering below $8 a share and reaching as low as $6.55 per share in June, even after its CEO doubled down, buying $1 million in company stock.
Rosen Law Firm was previously the firm behind a class action lawsuit filed against Zillow that alleged the real estate technology company defrauded investors by failing to disclose its agent-lender co-marketing program was in violation of real estate anti-kickback laws, specifically the Real Estate Settlement Procedures Act (RESPA).
The lawsuit was dismissed in October 2018, but the plaintiffs filed an amended complaint that is going forward after a federal court refused to dismiss the case, saying the plaintiffs had “plausibly alleged” that Zillow violated federal U.S. anti-kickback law through its agent-lender co-marketing program, and made misleading statements regarding its compliance.
Announcing an investigation in preparation of a class action lawsuit seems to be common from Rosen Law Firm, which, just this week, has put out three releases specifically announcing that it’s investigating Anheuser-Busch, Pintec Technologies and Eros International.
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