Pomerantz Law Firm Files Class Action Against CTO Realty Growth and Officers Over Securities Violations

Pomerantz Law Firm Initiates Class Action Against CTO Realty Growth

In a significant move for investors, the Pomerantz Law Firm has announced the filing of a class action lawsuit against CTO Realty Growth, Inc. (CTO), a publicly traded real estate investment trust (REIT), along with several of its top officers. This lawsuit, which was filed in the United States District Court for the Middle District of Florida and is listed under the docket number 25-cv-01516, is on behalf of all individuals and entities that purchased CTO securities between February 18, 2021, and June 24, 2025.

The class action seeks to recover damages incurred by investors due to alleged violations of federal securities laws, specifically under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as well as Rule 10b-5. Investors affected by this situation are encouraged to act swiftly, as the deadline to request appointment as Lead Plaintiff is October 7, 2025.

Background on CTO Realty Growth

CTO Realty Growth operates with a focus on high-quality retail properties predominantly located in high-growth markets across the United States. The company transitioned into a REIT in February 2021, and by the end of December 2024, had amassed a portfolio consisting of 23 income-generating properties across seven states, including the notable Ashford Lane retail and dining center in Atlanta, Georgia.

For REITs, there are regulatory requirements, as mandated by the U.S. Securities and Exchange Commission (SEC), to distribute at least 90% of taxable profits to shareholders in the form of dividends. Consequently, CTO has claimed that its structure offers a tax-efficient organizational framework that benefits its investors by delivering attractive and sustainable dividend returns.

Allegations Against Company Executives

The lawsuit's complaint asserts that throughout the class period, CTO's executives issued materially misleading statements about the company's operations and fiscal health. Specifically, investors were allegedly misled into believing that the sustainability of CTO’s dividend payouts was sounder than was actually the case. The complaint contends that the company utilized deceptive practices to inflate its Adjusted Funds from Operations (AFFO), consequently overstating its profitability and business forecasts.

Prominent within these allegations is the assertion that, contrary to what was communicated to the public, the sustainability of CTO’s dividends was suspect, and their AFFO was inflated through dubious accounting practices that did not consider recurring capital expenditures.

These claims gained traction following the publication of a critical report by Wolfpack Research on June 25, 2025, which drew negative comparisons between CTO Realty Growth and the troubled B. Riley financial services firm. Wolfpack's report contended that CTO had not generated sufficient cash to cover its recurring capital costs or dividend payouts since transitioning to a REIT. They cited alarming reports from former employees and whistleblowers, indicating that the company had resorted to diluting its shares to satisfy financial obligations, and utilized misleading definitions of its financial metrics.

As a result of these revelations, CTO's stock saw a sharp decline, dropping by $0.98 (approximately 5.42%), closing at $17.10 per share on the same day the report was published.

Pomerantz Law Firm’s Legacy

The Pomerantz Law Firm has established itself as a leader in the field of corporate, securities, and antitrust class litigation, having recovered billions for clients over several decades. Founded by the late Abraham L. Pomerantz, a notable figure in securities law, the firm's commitment to fighting for victims of securities fraud and corporate misconduct remains strong today. Investors who wish to join the class action or seek further information can visit www.pomerantzlaw.com or contact Danielle Peyton directly for assistance.

The filing of this class action represents a significant step in holding corporate executives accountable for their actions and ensuring that justice is served for the investors affected by alleged securities violations.