Investors sue Millrose Properties over hidden lease rentals and alleged fraud
Shareholders have filed a federal class action accusing Millrose Properties and two executives of misleading investors by buying $200 million of homes from Lennar and renting them out despite promises to avoid leases.
Investors Leon and Sylvia Rubenstein have filed a class action in the Southern District of Florida accusing Millrose Properties and executives Darren Richman and Garrett Rosenblum of securities fraud. The plaintiffs argue that Millrose repeatedly told investors it would concentrate on acquiring and developing residential land and would not enter into lease agreements, yet the company bought at least $200 million of completed homes from its former parent Lennar Corp. and rented them out, often at a loss.
Hunterbrook Media’s report, cited in the complaint, documented over 700 purchases across 51 counties in 15 states and suggested the rentals were part of a rent-to-own scheme, though on-site checks found many homes empty. Millrose’s shares fell 8.5 % after the report’s release. The suit also highlights that Lennar CEO Stuart Miller is Millrose’s largest voting shareholder, creating potential conflicts of interest. The investors seek damages for losses they say resulted from inflated stock prices due to the alleged misrepresentations.
Why it matters
The case could expose major misstatements by a publicly traded real-estate firm and affect investor confidence.
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