Industry News

Former Homestore CFO testifies against Wolff

Shew says boss was present when 'giveback' deals were discussed

Don't miss the real estate event of the summer
Join 4,000 real estate pros at Connect SF, Aug 7‑11, 2017

LOS ANGELES -- The criminal trial against former Homestore CEO Stuart Wolff, who faces criminal allegations of securities fraud and illegal insider trading of Homestore's stock, continued here Monday morning with the testimony of Joseph Shew, who was Homestore's CFO during part of Wolff's tenure as chief executive. Shew answered questions for several hours about multimillion-dollar transactions that Homestore set up with AOL, Cendant Corp. and other companies as part of an accounting fraud that was designed to pump up Homestore's quarterly advertising revenue during the dot-com heydays five years ago. "We were buying our own ads, and we were losing money to do it," Shew testified. "It was not a sustainable advertising model." The witness, a young sandy-haired man, who was wearing wire-framed glasses, a light gray suit, cream-colored shirt and diamond-pattern tie, testified that the company had hidden the substance of the "giveback" part of these deals from its auditors. "Of all the bad...