While Zillow may no longer be facing antitrust allegations from the Federal Trade Commission (FTC) about its $100 million multifamily rental syndication deal with Redfin after a settlement was reached in late August, company executives are now facing a shareholder lawsuit regarding the deal.
On Wednesday, shareholder plaintiff Shauna Binette Roth IRA filed the suit in King County Superior Court in Washington. The plaintiff is not seeking damages for themselves as the lawsuit is a derivative action, meaning that the plaintiff is trying to recover relief for Zillow itself.
The suit names Zillow CEO Jeremy Wacksman, chief financial officer Jeremy Hofmann, co-founders Richard Barton and Lloyd Frink, and eight other current or former directors, as defendants.
Details of the complaint
Like the FTC’s complaint, the new lawsuit alleges that Zillow effectively paid Redfin $100 million to abandon its multifamily rental advertising business.
At the time the deal closed, the two companies described the deal as a partnership. According to the suit, Zillow’s executive leadership and directors should have recognized the antitrust dangers the deal posed before approving it.
The complaint also alleges that company leaders made and/or allowed misleading statements regarding the deal. The plaintiff argues that statements describing the deal as a “partnership” were misleading because they didn’t disclose what she considers the real nature of the transaction — that Redfin was effectively exiting the multifamily rental advertising market and that the arrangement created substantial antitrust risk.
In addition, the complaint also alleges that the defendants knew about the antitrust risks prior to the information becoming public and due to this, they sold off more than $81 million worth of Zillow stock
Specifically, Frink was accused of selling off $33.9 million in stock, Barton of selling $29.8 million and Wacksman of $7.2 million. The plaintiff claims the timing was particularly suspicious because several defendants had historically made few or no discretionary open-market sales.
The complaint notes that Zillow’s stock declined after news about the antitrust litigation became public, with Class C stock falling from $77.05 on Sept. 30, 2025, after the FTC lawsuit was announced, to $32.19 by July 10, 2026.
Throughout the complaint, the plaintiff refers to the potential damages Zillow may experience depending on the outcome of its late August trial in the FTC suit. But that suit was settled prior to the shareholder complaint being filed. And the settlement does not require Zillow to pay any sort of fine or damages.
According to the shareholder suit, Zillow’s leadership team has breached their fiduciary duty, wasted corporate assets and engaged in inside trading. The plaintiff is seeking damages from the defendants and for Zillow to make corporate governance changes — including stronger internal controls and complaint procedures, as well as a shareholder vote on permanently separating the positions of CEO and chairman.
In an emailed statement, a Zillow spokesperson told HousingWire said that the firm’s partnership with Redfin is “pro-competitive and pro-consumer.”
“The resolution we recently reached with the FTC is a win for renters and multifamily housing providers,” the spokesperson added. “It enables us to keep our energy focused on innovating for renters and property managers, and ultimately making renting easier, more affordable and better for everyone.”
