eXp confirms ‘bad actors’ fired were defendants in sexual assault case
During the company's recent earnings call, CEO Glenn Sanford was asked about ongoing litigation that claims eXp ignored a pattern of sexual misconduct.
During the Q&A portion of eXp's third-quarter earnings call last week, an investor asked CEO Glenn Sanford to comment on a civil lawsuit that has implicated at least two agents, a top recruiter and Sanford himself.
What was said? "There is a lawsuit that's been out there. I know that there's been a New York Times writer that's been pursuing a lot of people for months on end. [We] still don't even know what the story might be," Sanford said in response to the question, adding that he hoped eXp would "get a chance to address it before it gets published."
He also indicated that eXp has already taken action against agents who were found to be "on the wrong side of the law."
"But just in all transparency, we believe that we had two bad actors in our agent base … We had let one of the agents go as soon as there were charges brought up against him. We let the other one go when there were some things that came to light through the civil suit. But with 89,000 agents, there's some bad actors."
Who was impacted? An eXp spokesperson confirmed to Real Estate News that the "bad actors" who were let go were Michael Bjorkman and David Golden, the original defendants in the civil lawsuit. In March, the complaint was amended to include Sanford and a top eXp recruiter and booster, Brent Gove, as defendants. Sanford and Gove filed motions to dismiss the suit shortly afterward.
Why was Sanford added to the suit? In the amended complaint, the plaintiffs said Sanford and Gove were aware of the actions outlined in the complaint "yet turned a blind eye." Following the defense's motions to dismiss, the plaintiffs added that Sanford and Gove not only knew about misconduct and sexual assault within the agent ranks but also stood to benefit from it through the company's recruiting efforts and revenue share model:
"Defendant Sanford, as founder and CEO of eXp, created a venture—the Revenue Share Pyramid upon which he sits atop as Agent No. 1. To keep this venture going, every agent in Defendant Sanford's pyramid must continuously recruit agents in their 'downline' who then are required to pay their 'upline,' which includes the Perpetrators, Defendant Gove, and Defendant Sanford," the complaint alleges.
Where does the case stand now? According to court documents filed in the U.S. District Court of the Central District of California, a variety of motions have been presented to the judge for review. One motion involves the use of pseudonyms — in addition to one named plaintiff, four of the plaintiffs in the case are listed as Jane or John Does. A hearing is scheduled for Nov. 20 to determine if the case is allowed to proceed with the use of pseudonyms.
Several motions requesting the dismissal of different aspects of the case are also currently under review. Court documents have not yet indicated a trial date.