Shareholders Say eXp Mishandled Assault Allegations In New Lawsuit

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Two shareholders have filed go well with towards Glenn Sanford, Jason Gesing and 5 different eXp World Holdings board members for mishandling a sequence of sexual assault allegations, new courtroom filings present.

The shareholders — the Los Angeles Metropolis Workers’ Retirement System and the Constructing Trades Pension Fund of Western Pennsylvania — stated Sanford and the board breached fiduciary duties by failing to make sure eXp had “cheap reporting and knowledge programs” to assist leaders “learn about and forestall” assault and misconduct, in accordance with paperwork filed Wednesday.

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Sanford and the Board’s alleged failings, the shareholders declare, led eXp World Holdings to expertise “vital hurt” to its repute and financial worth.

The Los Angeles Metropolis Workers’ Retirement System and the Constructing Trades Pension Fund of Western Pennsylvania have been shareholders since 2019 and 2021, respectively.

“This case includes harrowing acts of surreptitious drugging and sexual assault of eXp actual property brokers by the Firm’s high brokers or ‘Influencers,’” the 85-page submitting learn. “Since no less than 2018, Defendants knew that executives and Influencers — together with Michael Bjorkman, David Golden, Dave Conord, and dozens of others — had been systematically drugging and sexually assaulting eXp brokers at Firm occasions.”

“Defendants selected to cowl up this sexual misconduct, permitting it to proceed and endangering the protection of the true property brokers who make up the lifeblood of the Firm,” the submitting continued. “… The Board ignored these reviews and brokers’ pleas for recourse. As a substitute, Defendants orchestrated a cover-up to guard the assailants, prioritizing the income that inflated government bonuses over agent security and compliance with the legislation—in addition to fundamental human decency.”

The submitting highlighted three high-profile circumstances as proof of the management’s misconduct, together with two ongoing lawsuits towards former star brokers David Golden and Michael Bjorkman, who allegedly drugged and assaulted former eXp agent Anya Roberts and former eXp recruits Fabiola Acevedo, Tami Sims, Christiana Lundy and one other girl listed as Jane Doe 3. It additionally mentions Reno-based agent Misty Carter’s now-dismissed harassment lawsuit towards former workforce chief Chris Nevada, and allegations from no less than 25 different nameless folks.

Roberts and Acevedo’s fits argued eXp’s inaction was because of the substantial monetary earnings Bjorkman and Golden dropped at the corporate by means of its revenue-share program.

Income share payouts are based mostly on the variety of productive brokers a present eXp agent or dealer sponsors (i.e. recruits). Sponsors are given a share of their brokers’ adjusted gross fee earnings (AGCI), which is “dynamically calculated every month to make sure that eXp Realty pays out and retains 50 % of the corporate greenback (half of the 20 % cut up with brokers).”

The submitting stated Sanford, Gesing and board member Eugene Frederick have notably benefitted from the income share program through the years. In 2020, this system netted Sanford a bonus of $1.5 million and Frederick a bonus of $3.9 million. In the meantime, Gesing earned a bonus of $545,506 by means of this system in 2021.

The submitting stated Sanford has since “stopped formally collaborating” within the income share program; nonetheless, his compensation package deal has been up to date to provide him a money bonus that displays the distinction between his wage and the corporate’s income share quantity.

“The explanation for Defendants’ cover-up is obvious: Defendants prioritized their bonuses and boys’ membership over the fundamental security of the Firm’s staff and compliance with legislation,” the submitting learn. “Their bonuses are calculated based mostly on the income share earnings generated by the Influencers of their downline and could be very vital, because the Firm generates roughly $28 million per thirty days in income share earnings.”

“Realizing the upside potential of those ‘limitless’ bonuses, nonetheless, relies on high eXp Influencers staying with the Firm and persevering with to generate income share earnings,” it added. “A high Influencer leaving the Firm can be catastrophic for Sanford, Frederick, and Gesing’s income share as a result of it could put in danger the income share earnings generated by that Influencer and all of the brokers of their downline.”

The submitting additionally alleges Sanford and the Board has established a “tradition of worry and retaliation” and thwarted any efforts to create a strong reporting and response system for brokers and staff experiencing sexual harassment or assault.

“The method by which complaints had been dealt with at eXp is equally opaque,” the submitting learn. “For example, the Variety Director reported that there have been no timelines for processing complaints. He was alleged to be the escalation level for complaints of sexual misconduct, and but, he was instructed that he couldn’t course of the complaints.”

“He additional confirmed that he was by no means allowed to know the method for nameless emails. He was in a position to poke holes within the Firm’s insurance policies, and any time he challenged a coverage, he was instructed that he didn’t perceive the true property enterprise,” it added. “Each time he tried to get a coverage accredited, he was met with pushback and instructed that’s not how issues had been accomplished at eXp.”

Because of Sanford and the Board’s alleged actions, the shareholders are requesting the defendants return the income, advantages and different compensation they made through the time of the alleged assaults, the creation of a viable sexual assault and harassment reporting system, and several other different damages, prices and bills associated to the lawsuit.

An eXp World Holdings spokesperson responded to the go well with, noting the corporate “has zero tolerance for abuse.”

“We take our accountability to foster a protected and inclusive surroundings very critically,” they stated in an emailed assertion to Inman. “EXp Realty has zero tolerance for abuse, harassment, or misconduct of any form — together with by the unbiased actual property brokers who use our providers. The claims on this case stem from alleged assaults by unbiased actual property brokers — which we dealt with with seriousness and deep respect, according to our Firm values, insurance policies, and procedures.”

“The Firm will proceed to do its greatest to make sure we create a protected surroundings that gives a possibility for our staff and brokers to succeed,” they added.

Learn the complete submitting under: