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FINRA has opened a review into trading activity at Douglas Elliman linked to Anywhere Real Estate's failed takeover bid earlier this year. Regulators asked for internal records, communications, and a timeline of events leading up to late May, when Elliman's stock surged nearly 50% after news of the offer surfaced. The brokerage disclosed that board director Patrick Bartels purchased USD 250,000 of shares with internal approval just weeks earlier. Anywhere's initial USD 5-per-share proposal in March was later revised but ultimately rejected, and the talks ended in June.
The Financial Industry Regulatory Authority (FINRA) has started a review of trading activity at Douglas Elliman around the time of a failed takeover proposal by Anywhere Real Estate. The regulator is checking who at the brokerage knew about the offer before it was reported publicly in late May. The matter came to light through correspondence seen by Reuters and confirmed by people familiar with the development. Advertisement
FINRA's review is still at an early stage. According to its letters, the regulator asked Douglas Elliman to provide a detailed written timeline of the events leading up to media reports on the offer, which caused Elliman's share price to rise by nearly 50% in a single day. The regulator requested records such as board meeting minutes, internal communications with advisors, employee trading policies, and details of all trade clearance requests during the weeks before the share price jump.
Douglas Elliman responded that on May 7, one of its board directors, Patrick Bartels, sought permission from the company to buy USD 250,000 worth of Elliman stock. The company approved the request, and the transaction was later disclosed in filings with the U.S. Securities and Exchange Commission (SEC). This was the only trade highlighted by Elliman in its communication with the regulator. It is not clear whether FINRA's review is focused on this trade or if it is examining other transactions as well.
Sources confirmed that Anywhere initially approached Douglas Elliman in March with an offer of USD 5 per share. After considering the proposal, Elliman and its advisors prepared to move forward, but Anywhere withdrew its bid in mid-April. Later that month, advisors from Anywhere informed Elliman's bankers that a revised offer was being prepared, which was formally submitted around May 20. However, Elliman considered this revised bid unsatisfactory and chose not to pursue it further. The negotiations ended in early June.
Media reports about Anywhere's offer on May 23 led to a sharp spike in Elliman's share price, closing more than 30% higher on that day alone. The company's response to FINRA notes that Bartels sought approval for his trade on the morning of May 7, the same day Elliman was informed that Anywhere was working on a revised offer. He went on to complete the purchase in the days following.
The regulator has clarified in its communication that the inquiry should not be interpreted as evidence of any violation. FINRA routinely reviews unusual trading patterns and refers suspected cases of insider trading or market manipulation to the SEC for further action when required.
The company, however, has been dealing with several setbacks. It is facing civil litigation accusing the brokerage of enabling sexual assault by two former agents, claims it denies. It has also faced criticism from activist shareholders for weak financial performance and has reported multiple quarterly losses in the past year.
As Elliman manages these challenges, Anywhere itself has undergone major changes. Talks with Elliman ended in June, but recently brokerage Compass announced an agreement to acquire Anywhere in a deal valued at about USD 4.2 billion.
Source Reuters
5th Jun, 2025
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