Zillow Board Wants Derivative Suit Over CFPB Probe Tossed

Law360 (August 23, 2019, 7:18 PM EDT) -- Current and former directors of Zillow Group Inc. say shareholders alleging the company used an illegal co-marketing deal that drew the Consumer Financial Protection Bureau's attention failed to take their concerns to the board before filing suit.

The directors asked a Washington federal judge on Thursday to dismiss the shareholders' derivative suit, filed in October 2017 on the heels of a related securities class action that claimed Zillow maintained an illegal arrangement in which lenders paid for a portion of agents' advertising costs in return for mortgage referrals.

The derivative suit is based "almost entirely" on that securities suit, the directors...

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