NEW YORK— A Wall Street watchdog has opened an inquiry into trading activity surrounding a failed takeover bid for Douglas Elliman, one of New York’s most prominent luxury real estate brokerages.
The Financial Industry Regulatory Authority (FINRA), which polices U.S. markets, has asked Douglas Elliman to explain who inside the company knew about a takeover offer before it leaked to the public in late May, according to letters reviewed by Reuters and people familiar with the matter.
Stock Soared 50% After Leak
The probe is still in its early stages, but screenshots of FINRA’s letters show the agency wanted a full timeline of events before May 23, when reports of an approach by rival Anywhere Real Estate sent Douglas Elliman’s shares surging more than 50%.
In a June 9 letter, FINRA described its work as a “routine review of trading” and asked the company for records ranging from board minutes to clearance requests for stock trades in the month leading up to the news. The watchdog stressed that the inquiry should not be seen as proof of wrongdoing.
Spokespeople for Douglas Elliman, FINRA, and the SEC declined to comment. Anywhere Real Estate also did not respond.
A Director’s $250,000 Stock Buy
One detail that caught FINRA’s attention: a May 7 trade by board director Patrick Bartels, who asked permission to purchase $250,000 worth of Douglas Elliman stock. The company approved it, and the trade was later disclosed in an SEC filing. It’s unclear if FINRA’s focus is on that deal or others.
Bartels and his attorneys did not respond to repeated requests for comment.
A Storied Brokerage Under Pressure
Founded 114 years ago, Douglas Elliman is a familiar name in Manhattan luxury real estate. Its agents have starred in reality shows like Million Dollar Listing, and in 2019 the firm brokered hedge fund billionaire Ken Griffin’s record $238 million penthouse purchase.
But the brokerage is also under strain. It faces ongoing litigation alleging misconduct by former agents, has been targeted by activist shareholders, and has reported several quarterly losses.
Takeover Talks Collapsed
According to documents, Anywhere Real Estate first made a $5 per share offer for Douglas Elliman on March 5. The company and its advisors considered the bid, but Anywhere pulled back on April 16.
Weeks later, on May 20, Anywhere returned with a revised proposal. Just days earlier, Bartels had made his $250,000 stock buy. Then, on May 23, Bloomberg reported on the bid, sending shares soaring over 30% by day’s end.
By early June, Douglas Elliman rejected the revised offer as inadequate, and the talks collapsed.
Adding a twist to the real estate chessboard: on Monday, brokerage Compass announced it would acquire Anywhere in a deal worth roughly $4.2 billion.
Author Profile
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The writer is a real estate journalist specializing in all types of New York City properties, including luxury residences, commercial spaces, and homes.
He also writes humorous articles about real estate, investors, and realtors.
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