CTO Realty Growth Investors File Class Action Lawsuit Over Alleged Accounting Fraud

A class action lawsuit has been filed on behalf of investors who purchased CTO Realty Growth, Inc. (CTO) securities between February 18, 2021, and June 24, 2025. The lawsuit alleges that the company engaged in accounting shenanigans, including a sham loan to hide a top tenant's failure. The stock price fell 5.4% on June 25, 2025. Investors who purchased CTO securities have until October 7, 2025, to file a lead plaintiff motion.

A class action lawsuit has been filed on behalf of investors who purchased CTO Realty Growth, Inc. (CTO) securities between February 18, 2021, and June 24, 2025. The lawsuit alleges that the company engaged in accounting shenanigans, including a sham loan to hide a top tenant's failure. The stock price fell 5.4% on June 25, 2025. Investors who purchased CTO securities have until October 7, 2025, to file a lead plaintiff motion.

The lawsuit, filed in the United States District Court for the Middle District of Florida, alleges that CTO Realty Growth, Inc. made false statements and concealed material information. Specifically, the complaint accuses the company of:

1. Unsustainable Dividends: CTO's dividends were less sustainable than the company had led investors to believe.
2. Deceptive Practices: The company used deceptive and unsustainable practices to artificially inflate its Adjusted Funds from Operations (AFFO) and overstate the true profitability of its Ashford Lane property.
3. Overstated Business Prospects: Consequently, CTO's business and financial prospects were overstated.

The complaint also refers to a report published by Wolfpack Research on June 25, 2025, which accused CTO of not generating enough cash to pay its recurring capex and cover its dividends since converting to a REIT in 2021. The report further noted that CTO has just $8.4 million in cash while facing quarterly dividends of $14 million and average recurring capital expenditures of $5.7 million per quarter, along with approximately $12 million in additional planned capital expenditures.

Investors who purchased or otherwise acquired CTO shares during the specified period and suffered a loss are encouraged to contact legal firms representing the class action. The deadline to file a lead plaintiff motion is October 7, 2025. There is no cost or obligation to participate.

Key Firms Representing the Class Action:

- Bragar Eagel & Squire, P.C. [1]
- Levi & Korsinsky, LLP [2]
- The Gross Law Firm [3]

Investors can contact the respective firms for more information and to discuss their legal rights.

References:
[1] https://www.globenewswire.com/news-release/2025/08/16/3134549/0/en/CTO-ALERT-Bragar-Eagel-Squire-P-C-Announces-that-a-Class-Action-Lawsuit-Has-Been-Filed-Against-CTO-Realty-Growth-Inc-and-Encourages-Investors-to-Contact-the-Firm.html
[2] https://www.marketscreener.com/news/levi-korsinsky-reminds-cto-realty-growth-inc-investors-of-the-pending-class-action-lawsuit-with-ce7c51dedf8cf727
[3] https://www.morningstar.com/news/pr-newswire/20250818ny52504/the-gross-law-firm-reminds-shareholders-of-a-lead-plaintiff-deadline-of-october-7-2025-in-cto-realty-growth-inc-lawsuit-cto