The complaint centers on a February 2025 transaction between Zillow and Redfin, which the company initially framed as a strategic move to bolster its rental listings business. Plaintiffs allege that executives failed to disclose that the agreement effectively absorbed Redfin’s multifamily rental advertising operations, heightening the company's vulnerability to antitrust intervention. These claims gained traction on September 30, 2025, when the Federal Trade Commission sued both entities, alleging an unlawful market exit agreement.
Zillow Investors Face August 10 Deadline in Securities Fraud Lawsuit
Investors holding Zillow Group common stock between February 11, 2025, and May 7, 2026, have until August 10 to seek lead plaintiff status in a pending class action. Law firm Berger Montague filed the suit, alleging the company misled shareholders regarding the antitrust risks of its partnership with Redfin.
Financial strain followed these disclosures. By February 2026, Zillow reported that mounting legal expenses were eroding profitability. The situation intensified on May 7, 2026, when a federal court denied the defendants' motion to dismiss the FTC action, triggering significant declines in the value of Zillow’s Class A and Class C common stock.
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