Realogy Holdings Corp. (RLGY) Involved in U.S. Department of Justice Antitrust Investigation
According to the complaint against the Company’s officers and directors for breaches of fiduciary duties, unjust enrichment, waste of corporate assets, and for alleged violations of the Securities Exchange Act of 1934, from February 2017 to May 2019, Realogy’s officers and directors allowed the company to make false and misleading statements and omit material facts regarding its anticompetitive conduct, which resulted in property sellers paying inflated commissions to buyer’s brokers. The complaint further alleges that the company failed to maintain adequate internal controls. The truth of Realogy’s business practices was revealed in a series of articles from March to April 2019, resulting in Realogy’s stock price falling 6.1%. Then, on May 22, 2019, media reports revealed that the U.S. Department of Justice (“DOJ”) had opened an investigation on the antitrust practices of the real estate industry and identified Realogy as one of the companies under investigation. On this news, the stock price fell $0.71, over 9% to close at $7.13. In addition to the DOJ investigation, Realogy has been named a defendant in an antitrust action and securities class action, both of which are likely to subject Realogy to further financial damages.