A federal judge ruled yesterday that eXp must face accusations of fraud related to its actions in the wake of sexual assault allegations against top recruiters, writing that plaintiffs provided significant evidence that the brokerage lied about conducting an investigation into two men accused of drugging and assaulting women at company events.
“Plaintiffs allege, in great detail, the specific actions taken by various members of the eXp Defendants’ leadership team,” Judge Andre Birotte of the Central District of California said in a 13-page opinion. “Plaintiffs (sic) allegations are sufficient to meet the heightened pleading standards of fraud and have pled with particularity their allegations.”
The ruling comes as eXp Realty Founder and eXp World Holdings CEO Glenn Sanford faces a high-profile trial this year in one of several lawsuits accusing the company of complicity in the alleged pattern of druggings and assaults by two top agents, along with other misconduct by top executives.
The finding does not amount to a legal opinion that eXp did, in fact, fraudulently misrepresent its actions or investigation. Rather, Birotte found the allegations plausible and grounded in relevant law as described by the plaintiffs, with a jury likely having the final say.
In a statement provided to RISMedia, an eXp spokesperson wrote that the company “remain(s) steadfast that these claims against eXp are entirely without merit,” also noting that Birotte’s decision is “procedural.”
“We take our responsibility to foster a safe and inclusive environment very seriously and maintain a zero-tolerance policy for misconduct of any kind. We feel confident in our legal position and look forward to vigorously defending the company as this matter proceeds,” the spokesperson said.
Plaintiffs allege that despite receiving multiple, detailed accusations against two so-called “alpha agents” (Michael Bjorkman and David Golden), eXp leadership chose to not conduct any investigation while repeatedly misrepresenting to plaintiffs that they were investigating. The men are accused of a “scheme” that involved drugging and assaulting women at company events, with Bjorkman arrested in 2021 (though charges were later dropped).
After the first lawsuit was filed, eXp claimed publicly that accusations were “handled with speed, seriousness and deep respect as soon as the accusers brought it to our attention.” Sanford previously described the men as “bad actors.”
The decision
Citing internal communications produced during the lawsuit, plaintiffs point to occasions when eXp executives told them it had separated Bjorkman from the company even as it continued to pay him, and at notes from a 2020 meeting in which two executives told Bjorkman explicitly they would not be investigating complaints against him.
Executives, including Sanford, also told the women they were investigating long after an explicit decision had been made not to investigate, the plaintiffs claim.
Plaintiffs say they continued to affiliate with eXp based on the belief that eXp had separated Bjorkman and was investigating the other allegations, and went through “extreme emotional distress” as they repeatedly described the details of the assaults to eXp leadership, believing that it was helping an investigation they claim was never undertaken.
eXp, for its part, previously pointed out in court filings that plaintiffs have not disputed the company took statements and looked into the allegations, characterizing these actions as an investigation and noting that “action was taken,” as both men were eventually separated from the brokerage (though Bjorkman was paid around $1 million through the company’s revenue share after being fired, and Golden was not separated until the first lawsuit was filed about a year and a half later—officially for failing to pay MLS fees).
Birotte called this description “one interpretation of the facts presented by the plaintiffs,” but added it was “plausible” that the steps taken by eXp “were done to give the impression that an investigation was ongoing when in fact, no such investigation was present.”
He also rejected eXp’s argument that the women’s allegations were “ambiguous,” noting they point out specific people, dates, roles and statements that allegedly constitute fraud.
With the fraud claim moving forward, Birotte allowed both parties 60 more days for discovery, potentially pushing back a trial that had previously been scheduled for June.
Separately, eXp is facing a lawsuit from shareholders who claim the company’s actions harmed the company’s brand. A judge in Delaware recently allowed that lawsuit to move forward as well. Two other women have alleged the company retaliated against them for reporting misconduct in separate cases.
