Faruqi & Faruqi Alerts Investors About Upcoming Class Action Suit Against CTO Realty Growth

Investors Warned of Class Action Against CTO Realty Growth

Faruqi & Faruqi, LLP, a prominent national securities law firm, has recently alerted investors of CTO Realty Growth, Inc. (NYSE: CTO) regarding a pending class action lawsuit. The firm is currently investigating claims related to securities fraud involving the company, specifically focusing on the discrepancies in its financial statements and misleading communications made by its executives. Investors who purchased shares between February 18, 2021, and June 24, 2025, may have legal rights that warrant consideration.

The core issue highlighted by Faruqi & Faruqi centers on allegations that CTO Realty Growth made materially false or misleading representations regarding the sustainability of its dividends and the true state of its financial health. According to the complaint, CTO’s public statements regarding its operational profitability and dividend practices were allegedly deceptive, leading investors to have an inflated perception of the company’s stability and growth potential.

On June 25, 2025, significant developments occurred when Wolfpack Research released a report critical of CTO Realty, drawing unfavorable comparisons between the company and B. Riley, a financial services firm that recently suffered substantial losses. The Wolfpack Report alleged that CTO had been financially mismanaging its operations, specifically issuing claims that the firm had not generated sufficient cash flow to cover operational expenses and dividends since its transition to a Real Estate Investment Trust (REIT) in 2021.

According to the Wolfpack report, CTO's misleading accounting practices included defining Adjusted Funds From Operations (AFFO) in a manner that excluded recurring capital expenditures, ultimately presenting a distorted view of its financial performance. The report also cited the company’s reliance on excessive dilution—an increase of outstanding shares by 70%—to compensate for a staggering $38 million dividend shortfall during the period from 2021 to 2024.

Following the release of this damning report, CTO’s stock price reacted swiftly, dropping by $0.98 per share or 5.42%, closing at $17.10. This fall underscored the underlying concerns regarding CTO’s financial viability and prompted the firm to call upon affected investors to assess their options.

Faruqi & Faruqi has set October 7, 2025, as the date by which investors must register as lead plaintiffs in this class action case. Lead plaintiffs are defined as those investors who have the largest financial stake in the lawsuit, as well as the ability to represent the broader interests of the class. Investors interested in exploring their legal options are encouraged to reach out directly to Faruqi & Faruqi for guidance. It's worth noting that participation as a lead plaintiff does not affect the shareholder’s ability to receive recovery should the case conclude favorably for the class.

The firm is also interested in collecting information from whistleblowers, shareholders, and former employees who may have insights into CTO’s internal dealings. This investigation and resulting class action may provide a crucial opportunity for those who suffered financial losses due to the alleged mismanagement.

In conclusion, investors in CTO Realty Growth are urged to be vigilant and proactive in assessing how the evolving legal landscape may impact their investments. Faruqi & Faruqi stands ready to assist affected parties in navigating this complex situation, aiming to achieve justice and potential compensation for suffering shareholders.

For further inquiries regarding the class action lawsuit against CTO Realty Growth, individuals can visit Faruqi & Faruqi’s website or contact Partner Josh Wilson directly at 877-247-4292.