#United States #New York #Class Action #Pomerantz Law Firm #CTO Realty Growth

Class Action Lawsuit Filed Against CTO Realty Growth, Inc.

In a significant legal development, Pomerantz LLP announced the filing of a class action lawsuit against CTO Realty Growth, Inc. (NYSE: CTO) and several of its officers. The suit, lodged in the United States District Court for the Middle District of Florida, is intended for all individuals and entities who purchased or acquired CTO securities between February 18, 2021, and June 24, 2025. This action seeks to recover damages attributed to alleged violations of federal securities laws by the company and its leadership.

Background of the Case

CTO Realty Growth, which operates as a real estate investment trust (REIT), has come under scrutiny due to its business practices and the sustainability of its dividends. Established in February 2021, CTO claims to focus on high-quality retail properties within high-growth areas across the United States. As of December 31, 2024, the company managed a diverse portfolio that included 23 income-generating properties across seven states. Notable assets include the Ashford Lane retail and dining complex in Atlanta, Georgia.

Under regulatory guidelines by the U.S. Securities and Exchange Commission (SEC), REITs must distribute at least 90% of their taxable profits as dividends to maintain tax-exempt status on corporate income. CTO has promoted this strategic structure to highlight the potential for attractive, sustainable dividends to its shareholders.

Allegations Against CTO

The filing outlines allegations that throughout the designated Class Period, CTO’s executives made misleading statements regarding the firm’s business health, operational practices, and adherence to compliance protocols. It is claimed that:

• - The sustainability of CTO's dividends was misrepresented, raising red flags about financial practices meant to mask underlying issues.
• - There was a reliance on questionable and unsustainable practices to artificially inflate Adjusted Funds from Operations (AFFO), misleading stakeholders about profitability, particularly for Ashford Lane.
• - The company's overall financial health and business outlook were overstated, providing investors with distorted views of its performance.

The lawsuit cites a crucial report published by Wolfpack Research on June 25, 2025, which compared CTO unfavorably to B. Riley, a financial services entity that faced a dramatic decline in value due to various financial mismanagement issues. The Wolfpack Report alleged several failures, including:

• - CTO’s inability to generate sufficient cash flows to meet recurring capital expenditures and cover dividend distributions since converting to a REIT.
• - Strategies that included increasing share dilution (with a staggering 70% increase in outstanding shares since December 2022) to mask a $38 million dividends deficiency from 2021 to 2024.
• - Misleading definitions of AFFO that overlooked significant recurring capital costs, unlike its market peers.
• - Attempts to disguise financial struggles related to major tenants at properties like Ashford Lane.

The leaked findings appeared to have a direct impact on CTO’s stock, which plummeted by 5.42%, closing at $17.10 on June 25, 2025, following the report's release.

Legal Recourse for Affected Investors

Investors who acquired CTO securities during the Class Period have until October 7, 2025, to petition for appointment as Lead Plaintiff in this class action. Interested parties can find the complaint details at Pomerantz Law Firm's website. Discussions about the lawsuit can be directed to Danielle Peyton via email or phone, where she can provide further insights into the proceedings.

Pomerantz LLP, with its long-standing reputation in corporate, securities, and antitrust litigation, continues to hold companies accountable for their actions and recover damages for those adversely affected by corporate misconduct. For over eight decades, the firm has consistently represented the interests of shareholders confronting violations in securities law, making it a key player in the ongoing fight for investor rights.

Conclusion

The class action lawsuit against CTO Realty Growth illustrates the ongoing risks and regulatory challenges within the REIT sector. As the legal proceedings unfold, stakeholders and investors will closely monitor the case outcomes while raising questions about transparency and ethical practices in real estate investments.

For continuous updates regarding this case and related securities law matters, investors are advised to stay informed and engaged through reputable sources and legal channels.