By Mike Scarcella

June 16 (Reuters) - Online residential real estate platform Opendoor OPEN.O has agreed to pay $39 million to resolve a securities lawsuit accusing it of duping investors about the capabilities of proprietary pricing technology it uses to buy and sell homes.

Lawyers representing Opendoor investors filed the preliminary settlement on Friday in the federal court in Arizona. The deal requires approval by U.S. District Judge Michael Liburdi.

Opendoor, founded in 2014, markets itself as a fast, reliable platform for Americans to buy and sell homes. Investors sued the company in 2022, claiming it failed to disclose that its pricing algorithms could not adjust to changing real estate market conditions.

Opendoor and its lawyers at A&O Shearman did not immediately respond to requests for comment, and neither did attorneys for the plaintiffs.

San Francisco-based Opendoor denied any wrongdoing in agreeing to settle. The company said in a court filing it was settling to avoid the expense, risk and uncertainty of further litigation.

The company in May reported $1.2 billion in revenue for the first quarter, with 2,946 total homes sold.

The plaintiffs in a court filing said Opendoor misleadingly portrayed the company “as a tech disruptor that used AI-powered algorithms to buy and sell homes more profitably and efficiently than other traditional real estate companies.”

Opendoor instead relied on an undisclosed human-driven process for pricing houses that made the platform “just as susceptible to changing economic conditions as any other traditional real estate company,” according to the plaintiffs.

Opendoor’s stock price dropped more than 94% from its December 2020 initial offering to November 2022, investors alleged.

In their new filing, the plaintiffs called the settlement amount “a prompt and substantial tangible recovery.”

Lawyers for the plaintiffs said they would ask a judge to award them legal fees of up to 30% of the settlement, or $11.7 million.

The case is In re Opendoor Technologies Inc Securities Litigation, U.S. District Court, District of Arizona, No. 2:22-CV-01717-MTL.

For plaintiffs: Michael Canty and James Christie of Labaton Keller Sucharow

For Opendoor: Lyle Roberts of A&O Shearman

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(Reporting by Mike Scarcella)