Summary
A Zillow shareholder has filed a new derivative lawsuit against CEO Jeremy Wacksman and other current and former company executives and directors over the company's $100 million Redfin rentals agreement. The complaint alleges Zillow leadership failed to adequately disclose antitrust risks and cites more than $81 million in stock sales by company insiders. The allegations have not been proven. The lawsuit adds another layer of shareholder and governance litigation to the Redfin controversy after the FTC's antitrust challenge and subsequent settlement.
A Zillow shareholder has filed a new derivative lawsuit against CEO Jeremy Wacksman and other current and former company officers and directors, adding another legal challenge tied to the company’s $100 million rentals agreement with Redfin.
The complaint, filed Sept. 9 in King County Superior Court in Washington, alleges Zillow leadership failed to adequately disclose antitrust risks surrounding the 2025 agreement and claims certain insiders sold more than $81 million in Zillow stock before those risks became public. The lawsuit seeks recovery on behalf of Zillow itself rather than damages paid directly to the shareholder who filed the case. The allegations have not been proven, and the filing does not establish that any of the stock sales violated securities laws. HousingWire first reported the Sept. 9 filing, and Inman also detailed the complaint’s allegations.
The suit names Wacksman and other current and former Zillow executives and directors and alleges breaches of fiduciary duty, unjust enrichment and waste of corporate assets. According to the complaint, insiders sold more than $81 million in Zillow shares during the period highlighted by the plaintiff, including transactions by Wacksman, Zillow co-founders Rich Barton and Lloyd Frink, and Chief Financial Officer and Chief Operating Officer Jeremy Hofmann.
The complaint characterizes the timing of the sales as suspicious and alleges the defendants possessed material nonpublic information about the Redfin agreement and its potential antitrust exposure when some transactions occurred. Those allegations remain claims in civil litigation and have not been adjudicated.
Zillow’s SEC disclosures add context
Zillow’s securities filings provide important context for readers evaluating the allegations. SEC filings show that Wacksman’s stock transactions included sales reported as being made pursuant to a trading plan intended to satisfy the affirmative-defense conditions of Rule 10b5-1(c). One May 2025 Form 4 identifies a transaction under such a plan.
The existence of a Rule 10b5-1 plan does not by itself resolve the plaintiff’s allegations. It is, however, material context when reporting claims involving insider stock sales because Rule 10b5-1 plans are designed to provide an affirmative defense for trades made under qualifying prearranged plans.
The Redfin deal has already produced major antitrust scrutiny
Zillow entered the Redfin rentals partnership on Feb. 6, 2025. In its SEC filings, Zillow said it became the exclusive provider of multifamily rental listings on Redfin and related sites and made a $100 million upfront payment to Redfin. Zillow disclosed the agreement and payment in its quarterly filing.
The Federal Trade Commission and five states later challenged the arrangement. On Aug. 24, 2026, the FTC announced a stipulated order designed to resolve the litigation and restore competition in the multifamily rental advertising market. Under the proposed resolution, Redfin must return to the internet listing services market as an independent competitor while the Zillow-Redfin syndication relationship can continue under revised terms. Read the FTC’s Aug. 24 announcement.
Zillow said in an Aug. 24 SEC filing that the order contains no admission of liability or wrongdoing and that the partnership would continue through at least June 30, 2030, subject to the revised terms. Read Zillow’s SEC filing on the resolution.
This is not the first shareholder litigation over the Redfin partnership
Zillow previously disclosed that shareholder derivative suits were filed in federal court in July 2026 against certain executives and directors in connection with the Redfin partnership. The Sept. 9 state-court complaint is therefore another derivative action tied to the same broader controversy, not the first shareholder suit over the agreement.
That distinction matters. The new filing adds another set of allegations involving disclosure practices, corporate governance and insider stock sales, but it arrives against an already active backdrop of securities and derivative litigation connected to the Redfin partnership.
Why it matters for housing
Zillow remains one of the housing industry’s most influential consumer platforms, and the Redfin agreement reaches directly into the market for multifamily rental advertising. The latest lawsuit extends the fallout from that partnership beyond antitrust enforcement and into questions about corporate governance and executive trading.
What the shareholder is asking the court to do
The complaint is not limited to a request for money. According to HousingWire’s review of the filing, the plaintiff is also seeking corporate-governance changes, including stronger internal controls and complaint procedures and a shareholder vote on permanently separating the roles of chief executive and board chairman.
That matters because derivative litigation is structured differently from a conventional investor damages case. The shareholder is bringing claims on Zillow’s behalf and argues that company leadership caused harm to the corporation. Zillow itself is therefore named as a nominal defendant even though the requested recovery would ultimately be for the company.
The plaintiff also points to Zillow’s share-price decline after the federal antitrust case became public. HousingWire reported that the complaint cites Zillow Class C shares at $77.05 on Sept. 30, 2025, the day the FTC announced its lawsuit, and $32.19 on July 10, 2026. That comparison is part of the plaintiff’s theory of harm; it does not establish that the Redfin litigation alone caused the decline.
The new case joins an existing securities and derivative docket
The Sept. 9 complaint did not arrive in a vacuum. Zillow’s own second-quarter 2026 Form 10-Q says a federal securities class action, Breidert v. Zillow Group, Inc., was filed June 9 against Zillow and certain executives over disclosures related to the Redfin partnership. Zillow said the complaint alleges violations of federal securities laws and seeks damages for investors. The company denied wrongdoing and said it intended to defend the case vigorously. Zillow’s June 30 Form 10-Q also disclosed shareholder derivative suits filed July 13 and July 14 against certain executives and directors in connection with the Redfin partnership.
Those earlier derivative suits allege, among other things, that Zillow leaders breached fiduciary duties and caused the company to make allegedly false or misleading statements about the partnership. The company said in the filing that the defendants denied wrongdoing and intended to contest the claims. The newly filed Washington state action adds allegations centered on insider stock sales and governance failures to that broader litigation picture.
The FTC settlement changes the competitive landscape
The timing of the new lawsuit is unusual because it was filed after Zillow, Redfin and regulators had already announced a proposed resolution of the antitrust case. The complaint, as described by HousingWire and Inman, still refers to an upcoming August trial even though the FTC announced the settlement on Aug. 24.
Under the FTC’s stipulated order, Redfin is required to rebuild an independent multifamily internet-listing-services business, including technology infrastructure, a sales operation and customer support. The FTC said Redfin also committed to spend millions of dollars to relaunch and grow the business. Zillow must remove restrictions that could interfere with Redfin’s ability to compete, facilitate Redfin’s recruitment of certain Zillow employees and give some multifamily advertising customers an opportunity to renegotiate contracts after Redfin’s relaunch.
Zillow, however, emphasizes that the underlying syndication partnership remains intact. In an Aug. 24 Form 8-K, the company said the partnership and syndication of multifamily listings would continue through at least June 30, 2030, while both companies would be permitted to offer standalone advertising products. Zillow also noted that the order contains no admission of liability or wrongdoing. Read Zillow’s Aug. 24 SEC filing.
What housing professionals should watch next
The central claims still have to be tested in court. The most important near-term questions are whether the defendants move to dismiss the state derivative case, how the court treats the insider-trading allegations in light of disclosed Rule 10b5-1 plans, and whether the Sept. 9 lawsuit is coordinated with or consolidated alongside the other Redfin-related shareholder cases.
For the housing industry, the stakes extend beyond Zillow’s boardroom. The FTC case focused on competition in multifamily rental advertising, an important part of the digital housing-search ecosystem. The settlement now requires Redfin to rebuild an independent advertising business while preserving a syndication relationship with Zillow. That unusual structure will be watched closely by apartment operators, property managers, listing platforms and other housing-technology companies that rely on distribution agreements.
The new shareholder action adds another layer: whether Zillow’s board and executives properly evaluated and disclosed the legal risks of the partnership when it was approved, and whether stock sales cited by the plaintiff occurred under circumstances that create liability. Those remain allegations. But the case means the Redfin partnership will continue to generate legal scrutiny even after the government’s antitrust dispute moves toward resolution.
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