Industry News

Cendant, AOL may not be off the hook in Homestore lawsuit

SEC says court was wrong to dismiss business partners from shareholder suit

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A lawyer for the U.S. Securities and Exchange Commission, in a rare move, has filed a legal brief charging that a district court mishandled a shareholder case involving Homestore and several business partners, including Cendant Corp., AOL Time Warner and L90. Giovanni P. Prezioso, general counsel for the SEC, stated in a court brief filed Thursday that "the district court made several legal errors in its resolution of the claims against the business partner defendants" in the Homestore case, and that the court's decision "would undermine the purpose of the antifraud provisions" of the law. Homestore is affiliated with the National Association of Realtors and operates several real estate related sites including Realtor.com, a popular home-search Web site. The brief was filed last week in the U.S. Court of Appeals for the Ninth Circuit in California. The California State Teachers' Retirement System, which lost $9 million when Homestore's stock price dropped, filed a civil lawsuit in...