Ex-SEC Officials Urge Rehearing of Upheld Zillow Investor Class

Allowing a Zillow Group Inc. investor class may open the door for near-automatic certification in lawsuits with allegations that misrepresentations kept a company’s stock price afloat, securities law experts told an appellate court.

A three-judge panel erred in affirming class certification merely because alleged revelations and misstatements were on the same subject matter, misapplying a 2021 Supreme Court ruling involving Goldman Sachs Group Inc., six former Securities and Exchange Commission officials and law professors told the US Court of Appeals for the Ninth Circuit.

Upholding class status in this suit, which alleges the company misrepresented its home-flipping business’ pricing ...