Zillow settles years-long securities case for $212.5M
The deal, which is pending court approval, comes just weeks after the U.S. Supreme Court denied Zillow’s petition for review of the case’s class certification.
Zillow has agreed to pay $212.5 million to settle a lawsuit that investors filed years ago over the information company leaders disclosed about Zillow Offers, the company's iBuyer program.
The settlement in the case known as Jaeger — named for investor Jeremy Jaeger, who eventually became the case's lead plaintiff — was announced in an Oct. 28 filing with the U.S. District Court for the Western District of Washington and in an 8-K form that Zillow filed with the U.S. Securities and Exchange Commission.
What this case is about: Originally filed in November 2021, the plaintiffs accused Zillow leaders of "wrongful acts and omissions" resulting in an inflated stock price that dropped significantly once the company announced it would wind down Zillow Offers. The complaint alleged that the company did not tell investors about the unpredictability of its home price forecasts, leading to the demise of the iBuyer program.
Nearly five years later, the case now appears to be nearing its end. "We are incredibly pleased to obtain this result for investors, what we believe to be the largest single securities settlement in Western District of Washington history," said Steve Berman, managing partner of Hagens Berman. The law firm, which has been involved in the commissions antitrust lawsuits and a variety of other cases involving the real estate industry, has served as the case's court-appointed class counsel.
Zillow 'pleased' with the deal: A Zillow spokesperson said the company is "pleased that the parties have reached a resolution on the matter."
The settlement comes a little over three weeks after the U.S. Supreme Court declined to hear Zillow's petition to review the class status granted for the case in 2024.
What happens next: Zillow said in its 8-K that it will pay the $212.5 million into a settlement fund within 20 business days of the court granting preliminary approval of the deal.
The class of investors includes individuals who purchased Zillow's Class A or Class C stock between Aug. 5, 2021 and Nov. 2, 2021, according to Hagens Berman. There will be a period between the court's preliminary and final approval hearings when class members will be able to opt out or object to the settlement.