Citing internal documents and letters from regulatory agencies, Reuters is reporting that Douglas Elliman is under scrutiny for potential insider trading related to a rumored takeover bid by Anywhere this past spring, a deal that never materialized but sent Elliman’s stock soaring.
According to the Reuters report, the Financial Industry Regulatory Authority (FINRA), is in “the early stages” of a probe and has requested Elliman provide information about stock trades and who knew about the potential takeover offer.
The probe “should not be construed as an indication that FINRA has determined that any violations…have occurred,” the regulator told Elliman, according to Reuters.
A spokesperson for Douglas Elliman did not immediately respond to requests for comment. A spokesperson for Anywhere declined to comment. RISMedia could not independently verify the existence or details of the FINRA probe.
Notably, since the rumored merger, Anywhere received and accepted a takeover offer from Compass—a deal which still needs regulatory approval.
According to Reuters, however, the bid was very real, and Elliman had accepted, but Anywhere “backtracked” and came back with a “revised offer” weeks later. That new deal eventually fizzled out, according to Reuters, citing documents that are part of the FINRA investigation.
Bloomberg News was the first to report on the takeover bid back in May, days after Anywhere submitted its revised offer.
The same day Anywhere contacted Douglas Elliman’s advisors about the revised officer, one of Elliman’s board members, Patrick Bartels, requested permission to purchase $250,000 in Elliman stock, which was approved and executed “in the following days,” according to Reuters.
Bartels could not immediately be reached for comment.
Douglas Elliman’s stock jumped almost 50% the day after the takeover was reported by Bloomberg. Bartels’ trade was the only one highlighted by Elliman in its response to FINRA, according to Reuters.
Elliman’s stock is up sharply this year amid a broader market rally, but the company has faced larger struggles in the form of executive shakeups, a lawsuit alleging the company enabled sex trafficking and falling earnings.
This is a developing story. Stay tuned to RISMedia for updates.
