California real estate agents sue Compass for fraud
Compass is once again facing allegations of fraud from former employees.
A lawsuit filed by two agents in northern California alleges Compass defrauded them of millions of dollars in sales and commissions, HousingWire reported. The lawsuit also claims that the New York-based brokerage has reneged on its promises to give agents stock in the company. The plaintiffs are asking for class action status for their action.
The complaint was brought by Lisa and Todd Sheppard, a Sonoma County sales team. The couple allege Compass persuaded them to join us in 2018 by giving them a signing bonus, a marketing budget and office space. But the lawsuit claims that instead, the brokerage deducted the expenses from its commission on each sale.
Compass would also have been deducted from the couple’s commission if the team earned less than the standard 5% rate for each house sale. This rate is generally shared 50/50 between buyers ‘and sellers’ agents.
The Sheppards further allege that Compass misled them about the terms of the shares. They allege that they were given a “lower share level” compared to the company’s common stock.
This is the latest lawsuit against Compass, the technology-driven brokerage firm that went public last month.
In January, former Compass agent J. Gregory Maffei filed a lawsuit in California alleging that Compass used “unfair, illegal and fraudulent business practices” designed to gain market share.
Compass allowed agents to invest commission payments in company stock. But Maffei alleged that the model was nothing more than an “illegal Ponzi scheme or get-rich-quick scheme,” the complaint says. “Compass agents were forced to forgo hard-earned money to invest in Compass. “
[HousingWire] – Keith Larsen