Recent Class Action Filed Against CTO Realty Growth for Securities Violations

Class Action Filed Against CTO Realty Growth, Inc.

Pomerantz LLP has taken significant legal action by filing a class action lawsuit against CTO Realty Growth, Inc. (NYSE: CTO) and some of its top executives. The lawsuit aims to address alleged violations of federal securities laws that impacted investors who acquired CTO securities between February 18, 2021, and June 24, 2025.

Background of the Lawsuit

The lawsuit was lodged in the United States District Court for the Middle District of Florida, under case number 25-cv-01516. It represents anyone who purchased or acquired CTO securities during the specified class period, and it seeks to recover damages caused by the defendants’ alleged misconduct regarding the company’s financial disclosures.

For investors looking to take part in the legal proceedings, the deadline is set for October 7, 2025, to contact the court and request to be appointed as Lead Plaintiff. Those interested can find a copy of the lawsuit at Pomerantz’s official site, www.pomerantzlaw.com. Inquiries can be made through Danielle Peyton, reachable at [email protected] or by phone.

Understanding CTO Realty Growth

CTO Realty Growth is categorized as a publicly traded real estate investment trust (REIT). REITs are companies that own, operate, or finance income-producing real estate, and CTO has a portfolio focused on retail-centric properties primarily located in high-growth markets across the United States.

The firm transitioned into a REIT in February 2021, with its portfolio including properties such as Ashford Lane, a retail and dining center located in Atlanta, Georgia. One of the compliance stipulations for REITs is the requirement to distribute at least 90% of their taxable profits to shareholders as dividends which exempts them from most corporate tax obligations.

CTO has described its REIT structure as advantageous for shareholders, suggesting that it will enable the provision of attractive and sustainable dividends.

To gauge its performance, the company utilizes a financial metric known as Adjusted Funds from Operations (AFFO)—a figure preferred by analysts as it accounts for recurring capital expenditures while depicting a more precise calculation of profitability and dividend sustainability.

Allegations Against CTO

The complaint asserts that throughout the designated class period, the defendants made misleading statements about the company's operations and financial health. Notably, it’s alleged that CTO's dividends were less sustainable than what investors were led to believe. Furthermore, it alleges deceptive practices led to inflated AFFO figures, misrepresenting the profitability of CTO's properties, particularly the Ashford Lane site.

The situation intensified after a report was released by Wolfpack Research on June 25, 2025, which critiqued CTO’s operations and drew comparisons to a struggling financial services firm. The report claimed that CTO has been unable to generate sufficient cash to cover its dividends and essential capital expenditures since its classification as a REIT in 2021.

Wolfpack Research also alleged that the company resorted to increasing its shares outstanding to cover significant dividend shortfalls and described the method by which CTO calculates AFFO as problematic and misleading compared to its peers.

Stock Market Reaction

In response to the information revealed in the Wolfpack Report, CTO's stock price experienced a decline of 5.42%, dropping to $17.10 per share. This decline highlights the ongoing volatility and uncertainty surrounding the company’s financial standing and ability to meet its obligations towards investors.

Conclusion

Pomerantz LLP is recognized as a leading firm in securities and antitrust class litigation, having established a solid reputation over more than 85 years of operational history. Their commitment to supporting investors and holding companies accountable for fraud continues to be evident as they pursue this class action against CTO Realty Growth. For those affected by the alleged actions, there remains an opportunity to take part in this legal action before the approaching deadline.