Zillow agrees to $212.5 million settlement in class-action securities lawsuit
Key Facts
Zillow Group agreed to a $212.5 million cash settlement in a securities class action, with the full amount to be deposited into an escrow account within 20 business days of preliminary court approval, according to a StreetInsider report. The settlement will not become final before court approval, so the agreement does not mean the lawsuit has been closed. Insurance proceeds are expected to cover about $48 million of the settlement. The lawsuit includes Jaeger v. Zillow Group, while related shareholder derivative claims remain pending and are unaffected by the agreement. The settlement agreement contains no admission by the defendants of liability or wrongdoing.
The class includes individuals or entities that purchased or acquired Zillow Class A or Class C shares between August 5 and November 2, 2021, according to the report. The claims stem from statements made by the then-chief executive and other officials about the Zillow Offers unit. Investors said those statements painted an overly positive picture of the unit’s business. Zillow operated in the business of buying homes before it struggled to forecast prices and accumulated inventory. These allegations remain claims by plaintiffs and are not an established judicial finding.
In November 2021, the company announced plans to wind down Zillow Offers after saying its ability to accurately forecast home prices had been exceeded. It recorded an inventory write-down of about $304 million in its homes segment in the third quarter of that year, and forecast additional losses of between $240 million and $265 million in the fourth quarter, according to its quarterly results. In a separate report, Reuters said the company disclosed $300 million in write-down losses for the previous quarter and announced a 25% workforce reduction. Those developments followed the troubles in its home-buying business, which formed a key backdrop to investors’ claims. The lawsuit concerns what investors said was a misleading presentation of the unit’s performance in the preceding months.
The case followed a procedural path that stretched over years before the settlement agreement. On September 26, 2025, the Ninth Circuit Court of Appeals upheld class certification, according to Zillow’s filing with the Securities and Exchange Commission. The U.S. Supreme Court then declined on October 5, 2026, to hear the company’s effort to exit the case, leaving the lawsuit able to proceed. After the decision, plaintiffs’ attorney Steve Berman said: "We look forward now to taking this case to trial." The settlement agreement offers a financial resolution to the case, but remains subject to court approval.
According to the StreetInsider report, the agreement provides for the full amount to be deposited in cash into an escrow account within 20 business days of preliminary approval, with insurance coverage expected to be about $48 million. The report does not give a specific date for final approval or completion of the settlement. The agreement also does not cover related shareholder derivative claims, which remain pending. Zillow shares, listed under the ticker Z, closed at $32.05 on October 27, 2026, according to EL7 data. Court approval of the settlement remains the necessary step before the class claims can be considered covered by an effective agreement.