At a contentious meeting of the Multiple Listing Service of Northern Illinois earlier this month, you could feel the tension in the room from a reading of the shareholder minutes, which were sent to Inman News this week.

A recent forensic audit of the MLS “appears to be a head-hunting expedition,” said Earlene Williams, association executive for the West Towns Association of Realtors in the Chicago area. She believes some shareholders have used the audit to support a personal vendetta against MLSNI CEO Jay Huffman.

At a contentious meeting of the Multiple Listing Service of Northern Illinois earlier this month, you could feel the tension in the room from a reading of the shareholder minutes, which were sent to Inman News this week.

A recent forensic audit of the MLS “appears to be a head-hunting expedition,” said Earlene Williams, association executive for the West Towns Association of Realtors in the Chicago area. She believes some shareholders have used the audit to support a personal vendetta against MLSNI CEO Jay Huffman. Williams made a motion to immediately cease the audit, which she said already has cost MLSNI in excess of $400,000.

MLSNI is one of the largest association-owned MLSs in the country with more than 37,000 members in 6,000 offices throughout Chicagoland. The MLS has been in turmoil this year, with big brokers in the region pulling listings from some of their offices to instead exclusively list with a smaller, broker-owned MLS called MAP.

Shareholders ordered a forensic audit of MLSNI in April after the late arrival of MLSNI financial reports and questions regarding MLSNI’s investment in REBIG, a Chicago-based venture that helps MLSs negotiate data licensing deals.

Williams said the audit disclosed no financial or ethical issues concerning Huffman or REBIG.

REBIG’s founder and CEO Brenda Huffman is the wife of MLSNI CEO Jay Huffman. MLSNI invested money in REBIG when it was just starting, and over the last several months, MLSNI shareholders, directors and members have been reviewing that investment for alleged conflicts of interest.

Referring to the stir over the audit, “events of the last few months may have destroyed REBIG, which means we have lost our investment, ” Williams said during the Aug. 9 meeting.

Williams’ motion was defeated, with four of the shareholder associations voting to cease and six voting not to cease the audit without a final report. The four that voted to end the audit were Aurora Tri-County, McHenry, Fox Valley and West Towns, according to the minutes. Opposing associations were Chicago, North Shore Barrington, Northwest, West/South Suburban and Three Rivers.

Williams also said she’s concerned about private meetings between association executives of the Chicago Association, North Shore Barrington Association and the West/South Suburban Association and possibly the Northwest Association.

“These associations are acting in collusion with each other and appear to be forming a conspiracy to ‘unlevel’ the playing field at the command of big brokers. They are reacting to threats of big broker membership loss and not acting in the best interest of the largest part of their membership and MLSNI,” Williams said, according to the meeting minutes.

Marsha Lansdorf, association executive of the Aurora Tri-County Association also read a prepared statement that was recorded in the shareholder meeting minutes. The association wanted to go on record as stating its position that the results of the forensic audit as presented to MLSNI shareholders on Aug. 3 are “unreliable, biased and allegations contained within were proved to the unsubstantial and should be totally discounted.”

The Aurora Association has doubt as to the reliability of the report, saying the scope of the interviewees was limited and that only one executive officer–Terry Penza, of the North Shore Barrington Association–was interviewed. The Aurora association also said it will “intensely oppose further audits or actions taken against Jay Huffman, Brenda Huffman, the MLSNI board of directors and REBIG.”

The prepared statement was signed by Aurora Association EVP Kristine Hettinger, President-Elect Diana Cook and Immediate Past President Ted Laatz.

On the other side of the debate, the Chicago Association read a resolution for consideration at the shareholder meeting, including recommendations that MLSNI terminate its auditors, accountant and legal counsel. The association also recommended that MLSNI discontinue further funding of REBIG until the company provides financial statements, and that the board of directors ask Jay Huffman to immediately resign.

After shareholders reviewed and discussed this resolution, a motion was made to table the resolution until Huffman was able to answer questions raised in the audit, but that motion was defeated by a weighted vote. Huffman was asked to leave the Aug. 3 meeting in which shareholders first received the audit results. Huffman also was not allowed to take part in the Aug. 9 meeting, his attorney said in a previous interview.

Another motion was made to remove the word “shareholder” from the resolution recommendations to instead include the names of the boards and associations that voted for the resolution. That motion was defeated in a 6-4 vote.

The MLSNI board of directors will hold a special meeting Wednesday to discuss the resolution presented by shareholders.

***

Send tips or a Letter to the Editor to jessica@inman.com or call (510) 658-9252, ext. 133.

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