Homestore.com faked revenue in the dot-com era — its CEO got 3-5 years in prison

Homestore.com was founded by Stuart Wolff in 1996 and went public in 1999, becoming the leading online real estate marketplace. At the height of the dot-com boom, the company was valued at over $1 billion. But behind the growth, Wolff and other executives were falsifying revenue results to meet Wall Street expectations, inflating earnings through improper accounting practices.

The SEC investigated Homestore in 2002, forcing the company to restate its financial results for 2000 and 2001. Wolff resigned as CEO in January 2002. The stock collapsed, and the company was delisted from the NASDAQ. It changed its name to Homestore, Inc. and later rebranded as Move, Inc.

Wolff was convicted of insider trading and falsifying revenue. His conviction was overturned on appeal in 2008, but he later plea-bargained and was sentenced to 3-5 years in prison. Several other Homestore executives also received prison sentences for inflating earnings. The scandal became a cautionary tale of dot-com era accounting fraud.