Two investors have filed a proposed securities class action against Millrose Properties, Inc., alleging it misled shareholders about plans to buy completed homes from Lennar Corporation for rent and the scope of its business model.
Leon and Sylvia Rubenstein filed the complaint Friday, Oct. 9, in the U.S. District Court for the Southern District of Florida. It names Millrose CEO Darren L. Richman and CFO Garrett Rosenblum as defendants and seeks to represent people and entities that acquired Millrose securities from Feb. 7, 2025, through Oct. 2, 2026. The Rubensteins assert claims under Sections 10(b) and 20(a) of the Securities Exchange Act and Securities and Exchange Commission Rule 10b-5. They allege Millrose intended to spend $200 million on Lennar properties and rent them at a loss; a court has not ruled on the claims.
Millrose’s prospectus described a homesite business and said it did not plan to enter lease agreements in the foreseeable future. An amendment to a company agreement, dated Aug. 27 and filed with the Securities and Exchange Commission on Sept. 1, added a defined category for completed single-family homes acquired by Millrose or its affiliates to operate as rentals. The amendment predates the report at the center of the complaint, but does not state how many homes were bought or whether they were rented at a loss.
In its Oct. 2, 2026, report, Hunterbrook Media said its deed-record review identified more than 700 Millrose purchases of Lennar homes across at least 51 counties in 15 states. The outlet estimated the purchases were worth $200 million or more over roughly a month. The complaint repeats that estimate. Hunterbrook also disclosed that its related investment firm was short Millrose and Lennar and long a basket of comparable securities.
Hunterbrook counted at least 356 purchases during Lennar’s final fiscal week and said the homebuilder’s deliveries ended 340 homes above the low end of its forecast. The outlet argued that the transactions helped Lennar meet that threshold. Its report also described homeowners’ concerns that rental use could lower resale values in affected communities.
Bronstein, Gewirtz & Grossman said investors have until Dec. 8 to ask the court to appoint them lead plaintiff. The firm said investors can remain part of a potential recovery without taking that role. Millrose has scheduled its third-quarter results for Oct. 27 before the market opens, followed by a conference call at 10 a.m. ET.
