A Wall Street watchdog is looking into whether any investors with inside information made a quick buck in May when news broke that Anywhere Real Estate Inc. was in talks to acquire Douglas Elliman Inc.
The deal never materialized, but shares in Douglas Elliman spiked on May 23 when news broke that a merger might be in the works.
Now the Financial Industry Regulatory Authority (FINRA) has asked Douglas Elliman who had knowledge of Anywhere’s offer, Reuters reported Wednesday, citing three anonymous sources.
FINRA submitted a written request to Douglas Elliman for minutes of board meetings, and details of any requests made by company executives for clearance to trade company shares in the month leading up to the price spike, Reuters said.
Douglas Elliman did not immediately respond to Inman’s request for comment.
FINRA supervises stock broker-dealers under the oversight of the Securities and Exchange Commission (SEC), writing and enforcing the rules that govern stockbrokers and examining member firms to ensure compliance with federal law and FINRA’s rules.
Last year FINRA investigated 11,908 investor complaints, made 1,369 referrals to the SEC and other regulators, filed 730 disciplinary actions and imposed $99.6 million in fines and restitution.
FINRA’s probe of Douglas Elliman is in the early stages, with the regulator’s market abuse division requesting details from the brokerage in June and August, Reuters reported.
Rather than acquiring Douglas Elliman, Anywhere this week agreed to be acquired by its chief rival, Compass, for $1.6 billion.
