Shareholders Sue Real Estate Group FBRT Over Dodgy Dividend Claims

A class action lawsuit was filed against real estate group Franklin BSP Realty Trust (FBRT) on February 26, 2026.

The federal securities lawsuit alleges that plaintiffs -shareholders- acquired FBRT stock at artificially inflated prices between November 5, 2024 and February 11, 2026, known as the “Class Period.” Plaintiffs are now seeking compensation for financial losses incurred upon public revelation of the company’s alleged misconduct during that time. To learn whether you may be eligible for a recovery under this securities lawsuit, click here.

What Does FBRT Do?

It is a real estate investment trust (“REIT”) engaging in the origination, acquisition and management of  a portfolio of commercial real estate debt secured by properties across the United States. In addition to its core lending platform, the Company says it makes its agency origination capabilities available through NewPoint Real Estate Capital. Doing so allows it to provide “permanent financing solutions” through Fannie Mae, Freddie Mac, and FHA.

The company used to be known as Benefit Street Partners Realty Trust, Inc., but changed its name to Franklin BSP Realty Trust, Inc. in October 2021. Founded in 2012, the company is based in New York City and has approximately 220 employees.

Why are Investors Suing FBRT?

FBRT and three of its current and/or former senior officers (the “Individual Defendants”) are now accused of deceiving investors by lying and withholding important information about the company’s business practices and prospects during the Class Period.

In particular, they are accused of omitting truthful information about the company’s ability to maintain its dividends from SEC filings and related material. By knowingly or recklessly doing so, they allegedly caused FBRT stock to trade at artificially inflated prices during the time in question. The truth came out, according to shareholders, in a series of events that began after the market closed on February 10, 2026 and continued after the market closed the next day.

Finally, before the market opened on February 12, 2026, the company held its earnings call for the 4^th quarter of 2025. In this context, the company’s new CEO (an Individual Defendant) stated in pertinent part: “For several quarters, we have discussed our earnings undercovering our dividend. After a thoughtful analysis, we decided it was no longer prudent to sacrifice book value to pay that dividend. Accordingly, management has recommended and the Board has approved a reset of the quarterly dividend to $0.20 per common share beginning the first quarter of 2026. The company continues to have earnings power to support a meaningfully higher dividend than $0.20. That has not changed. But in the near term, rather than returning capital to shareholders by over distributing, we want to stabilize our book value and better match our current earnings to our dividend.”

Taking a Closer Look

As alleged, the company and/or Individual Defendants repeatedly made false and misleading public statements throughout the Class Period.

During an earnings call held at the beginning of the Class Period, for instance, the company’s CFO (an Individual Defendant) stated in relevant part: “While GAAP and distributable earnings did not cover our quarterly dividend, we remain confident that our dividend level accurately reflects our portfolio’s long-term stabilized earnings potential and we’re comfortable with the current level.”

Next, during another earnings call held on July 31, 2025, FBRT’s then-CEO (an Individual Defendant) stated in pertinent part: “Our portfolio of post-interest rate hike loan originations was 56% of our portfolio at quarter end and meaningfully ahead of our peers. This reflects how active we have been in the market over the past 2.5 years. Distributable earnings were $0.27 per fully converted share. We believe there is a clear path to growing this to a level that supports our dividend.”

Lastly, during an October 30, 2025 earnings call, the company’s CFO stated in relevant part: “We continue to sell REO and redeploy that capital into new originations. We estimate this activity can contribute approximately $0.08 to $0.12 per share per quarter to distributable earnings over time. We also saw a strong contribution from NewPoint in its first full quarter as part of FBRT, generating $9.3 million of distributable earnings or $0.09 per fully converted share.”

Actions You May Take

If you have purchased the company’s stock during the Class Period, you may join the lawsuit as a lead plaintiff, remain a passive class member, or opt out of this litigation and pursue individual claims that may not be available to the class as a whole. To learn more about your options, click here.

The deadline to file for lead plaintiff in this lawsuit is April 27, 2026.