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Investor alleges Zillow lied about co-marketing program

Lawsuit seeks class-action status on behalf of shareholders
  • A lawsuit alleges Zillow Group defrauded hundreds or thousands of investors by not disclosing that its agent-lender co-marketing program is not compliant with RESPA.
  • Zillow Group maintains that its acts and practices are lawful and that its co-marketing program allows agents and lenders to comply with RESPA.
  • The outcome of settlement talks between Zillow Group and the CFPB is pending.

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A Zillow Group shareholder has filed a lawsuit alleging the company and its two top executives defrauded investors by misrepresenting its co-marketing program's compliance with an anti-kickback law, thereby artificially inflating the real estate giant's stock price. The lawsuit seeks class-action status on behalf of other Zillow Group investors and comes as Zillow Group heads into settlement talks with the Consumer Financial Protection Bureau, which recently concluded a two-year federal investigation of the company's co-marketing program for compliance with the Real Estate Settlement Procedures Act (RESPA). Zillow Group declined to comment for this story, citing pending litigation. The company has consistently maintained that it believes its "acts and practices are lawful" and that its "co-marketing program allows lenders and agents to comply with RESPA." On Aug. 8, Zillow Group revealed that the CFPB had "invited" the company to discuss a settlement and had threatened lega...