Recent interests concerning Homestore.com (NASDAQ: HOMS) stock purchases by NAR officials have resulted in the organization appointing an ad hoc committee to develop a policy for dealing with potential conflicts of interest when REALTOR® representatives serve on boards of directors of companies doing business with the trade association.

The NAR decided to empanel the committee after NAR President Sharon Millett and President-elect Dennis Cronk voluntarily disclosed their stock ownership interests in Homestore.com, operator of the REALTOR.com Web site, which is partially owned by the NAR.

To erase any suggestion of conflict, Millett sold her shares so she could continue to serve on boards working with Homestore. Rather than sell his shares, Cronk said he would not serve on the board.

Both Millett and Cronk currently are out of the country on NAR business and could not be reached for additional comment.

Earlier this month Millett and Cronk told the NAR Leadership team they had been on Homestore’s "friends and family" list that had allowed them to purchase shares of Homestore at the IPO price of about $20 per share.

In a pre-IPO lottery, all Realtor members were given a chance to purchase 100 shares at the IPO price. The shares were sold on condition that they not be resold for at least six months.

By virtue of their executive status, Millett and Cronk were offered additional shares without the sale date restriction.

The disclosure stated that, "At the time of the IPO, Dennis Cronk bought 16,500 shares at the IPO price of $20 per share. Also at the time of the IPO, Sharon Millet bought 15,000 shares at the IPO price of $20 per share.

"She immediately found it difficult having limited participation in discussions and votes at the Leadership Team meetings concerning Homestore.com and technology issues because of the conflict her stock ownership caused. Therefore, she subsequently sold all her stock within 10 business days of the IPO."

It is not known how much Millett received for her shares. During that interval, the Homestore stock price was reaching the low $40s.

NAR leader Joe Hanauer also was provided 40,000 options, exercisable over the next ten years at the IPO price of $20.

Some rank and file members of the NAR have lodged complaints against Millett’s and Cronk and have called for an inquiry into their stock dealings. They argue Millett and Cronk should not be allowed to profit beyond what rank and file members have been allowed to profit.

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