CTO Realty Growth Investors May Lead Class Action Lawsuit Over Alleged Securities Violations

Bronstein, Gewirtz & Grossman LLC has filed a class action lawsuit against CTO Realty Growth, Inc. alleging violations of federal securities laws. The lawsuit claims that the company's dividends were less sustainable than claimed and that it used deceptive practices to inflate its AFFO and overstate profitability. Investors who purchased CTO securities between February 18, 2021, and June 24, 2025, are encouraged to join the case. The lead plaintiff deadline is October 7, 2025. The law firm represents investors on a contingency fee basis and has recovered hundreds of millions of dollars nationwide.

Bronstein, Gewirtz & Grossman LLC has filed a class action lawsuit against CTO Realty Growth, Inc. (CTO), alleging violations of federal securities laws. The lawsuit claims that the company's dividends were less sustainable than claimed and that it used deceptive practices to inflate its Adjusted Funds From Operations (AFFO) and overstate profitability [2].

Investors who purchased CTO securities between February 18, 2021, and June 24, 2025, are encouraged to join the case. The lead plaintiff deadline is October 7, 2025 [2]. The law firm represents investors on a contingency fee basis and has recovered hundreds of millions of dollars nationwide [2].

The complaint alleges that CTO made false and/or misleading statements and/or failed to disclose that its dividends were less sustainable than investors were led to believe. It also claims that the company used deceptive and unsustainable practices to artificially inflate its AFFO and overstate the true profitability of its Ashford Lane property. Consequently, CTO's business and/or financial prospects were overstated, and its public statements were materially false and misleading at all relevant times [2].

Investors who suffered losses as a result of these alleged actions are urged to contact Bronstein, Gewirtz & Grossman LLC to discuss their legal rights. The firm's contact information is provided on its website [2].

This class action lawsuit is the latest in a series of challenges facing CTO. In June 2025, Wolfpack Research published a report alleging that CTO engaged in accounting shenanigans, including using a sham loan to cover up a top tenant's failure. The report also claimed that CTO obfuscated its impotence by excluding recurring capex from AFFO and overpaid for properties, which injured investors [1].

CTO's stock price fell by $0.98, or 5.4%, to close at $17.10 per share on June 25, 2025, following the report [1]. The company's aggressive share dilution and high dividend obligations have also raised concerns about its liquidity risks [3].

Investors are advised to scrutinize high-yield REITs with non-GAAP metrics, aggressive dilution, and weak governance, as CTO's 8.5% yield carries asymmetric risks of dividend cuts or credit downgrades [3].

References:

[1] https://www.morningstar.com/news/business-wire/20250814770851/law-offices-of-howard-g-smith-encourages-cto-realty-growth-inc-cto-investors-to-inquire-about-securities-fraud-class-action
[2] https://www.marketscreener.com/news/cto-bronstein-gewirtz-grossman-llc-announces-that-cto-realty-growth-inc-investors-with-substant-ce7c51d9dc80f22c
[3] https://www.ainvest.com/news/cto-realty-growth-cautionary-tale-reit-investors-2508/