Pomerantz Law Firm Files Class Action Against CTO Realty Growth for Alleged Securities Violations

Pomerantz Law Firm Files Class Action Against CTO Realty Growth, Inc.

Introduction
In a significant legal development, Pomerantz LLP, a leading law firm known for its class action litigation, has announced the filing of a class action lawsuit against CTO Realty Growth, Inc. This legal action, which is purposed to protect investors who purchased CTO's securities, has been lodged in the United States District Court for the Middle District of Florida.

Background of the Issue
CTO Realty Growth, Inc. (NYSE: CTO) is recognized as a publicly traded real estate investment trust (REIT) specializing in retail-based properties across the United States. Since converting to a REIT in February 2021, the company has aimed to provide investors with attractive, sustainable dividends as it has a business model that requires it to pay out at least 90% of its taxable profits. However, the recent filing exposes allegations that the company's dividends were not as secure or sustainable as presented, raising critical concerns regarding its operational integrity.

During the period spanning from February 18, 2021, to June 24, 2025, investors have claimed that CTO Realty Growth misled them about the company’s actual financial performance and the sustainability of its dividend payouts. Among the serious allegations in the complaint are claims that CTO excessively utilized deceptive practices to inflate its Adjusted Funds from Operations (AFFO) and overstated the profitability of its properties, especially the Ashford Lane retail and dining center located in Atlanta.

Legal Framework and Next Steps
This lawsuit is being pursued under the Securities Exchange Act of 1934, which protects investors against deceptive practices in the securities industry. Investors who acquired CTO securities during the class period and feel they may be affected by these allegations are urged to act swiftly—specifically, they have until October 7, 2025, to request to be appointed as Lead Plaintiff in the ongoing case. Interested parties can obtain more information and the official complaint through the Pomerantz Law Firm's website.

Detailed Allegations
The complaint puts forth several key allegations against the defendants, asserting that throughout the identified class period, CTO's management disseminated materially false and misleading statements about the company’s operational status and compliance with securities regulations. Notable assertions include:
1. CTO claimed its dividends were secure, yet evidence suggests these payouts were less sustainable than disclosed to investors.
2. The company allegedly used misleading tactics to artificially enhance its AFFO numbers, misrepresenting its actual profitability.
3. Specific statements made publicly were said to be materially inaccurate, leading investors to have an inflated perception of the company's viability.

These allegations gained greater public attention following a revealing report released by Wolfpack Research on June 25, 2025. Citing interviews with former employees, the report criticized CTO’s financial practices, indicating that the company had not generated sufficient cash to sustain its dividend obligations without resorting to dilutive measures.

Impact of the Allegations on CTO Realty Growth
In light of the Wolfpack report, CTO's stock value experienced a notable decline, dropping 5.42% per share in one day, highlighting the market's reaction to these emerging challenges. The report predicted future difficulties for CTO, suggesting that without adequate cash reserves to meet dividend requirements, the company's mismanagement could lead to further financial strain and dilution of shares.

Pomerantz LLP’s Role
Pomerantz LLP, with over 85 years of experience in class action litigation, aims to fight for the rights of those impacted by corporate misconduct. Their dedication to addressing fraud in the securities field has allowed the firm to recover billions for investors over its History. The lawsuit against CTO Realty Growth underscores Pomerantz's commitment to seeking justice for shareholders who may have been misled by the company's practices.

Conclusion
As the situation develops, investors associated with CTO Realty Growth should stay informed regarding the ongoing legal proceedings. This case serves as a crucial reminder in the realms of corporate governance and accountability for public companies in maintaining transparency with their investors. The outcome could set a significant precedent regarding the responsibilities of REITs and the adherence to the extensive regulatory framework governing this industry.