Newmark Group settles derivative lawsuit with insurance funds

Newmark Group , Inc. (NASDAQ:NMRK), a leading real estate services firm with a market capitalization of $3.32 billion and impressive 30% stock return over the past year, has reached a settlement in a derivative lawsuit filed by shareholders, according to a recent 8-K filing with the U.S. Securities and Exchange Commission. InvestingPro data shows the company maintains a FAIR financial health score, with management actively buying back shares. The settlement, dated February 7, 2025, resolves allegations against the company’s board of directors and certain executive officers regarding a 2021 cash bonus awarded to Newmark’s Executive Chairman and the redemption and exchange of partnership units.

The agreement, which is awaiting court approval, will be financed entirely through insurance proceeds that will be disbursed to the plaintiffs’ legal counsel and Newmark Group itself. The settlement includes a release of civil claims against the company’s board and executive officers, with no admission of liability.

Newmark Group and the other defendants have agreed to the settlement to avoid the costs and uncertainties of continued litigation. Details of the settlement are to be published on Newmark’s investor relations website and are attached as Exhibit 99.1 to the 8-K filing.

This legal update is based on information contained in the SEC filing and does not include any forward-looking statements or implications for Newmark Group’s future performance. The settlement is part of the company’s ongoing efforts to address and resolve legal matters and is not expected to have a material impact on its operations or financial results.

In other recent news, Newmark Group Inc. has seen significant developments. The commercial real estate advisory firm announced the rebranding of its London-based acquisitions BH2 and Gerald Eve under the Newmark name, a move that aligns with its international expansion strategy. The company reported a compound annual growth rate of over 60% in international revenue, generating nearly $350 million from outside the U.S. in the year leading up to September 2024.

In the realm of analyst perspectives, Goldman Sachs initiated coverage on Newmark with a Buy rating, pointing to the company’s successful market share gains and strong financial position as key factors. However, Wolfe Research downgraded Newmark from Outperform to Peerperform, citing slowing growth momentum and potential risks in the broader market.

In addition, Piper Sandler maintained its Overweight rating on Newmark shares, citing potential structural simplification and independence following the nomination of Chairman Howard Lutnick as Commerce Secretary. Upon confirmation, Lutnick plans to step down from his roles and divest his stake, a move that Piper Sandler views as positive for the company.

Lastly, Lutnick’s nomination as U.S. Secretary of Commerce has been announced. He intends to resign from his roles at Newmark, Cantor, and BGC, and divest his interests in accordance with U.S. government ethics rules. Newmark anticipates no changes to its corporate structure following Lutnick’s departure.

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