The earnest money is supposed to be put up by the buyer so that if the buyer fails to live up to the contract, the seller has some compensation. Your contract probably states something to the effect of: if the buyer doesn't cough up the dough on time, you can quit the deal.
Based on your report, I don't see how the buyer's agent was at fault - s/he informed your agent that the earnest money wasn't deposited as required by the contract. Your agent, however, hid this fact from you AND attempted to cover it up by - what, putting his own money up for the buyers?
How is this going to play out? If the transaction closes, then . . . I don't know, I think your agent has to be reported for failing to inform you of the buyer's breach of contract. If it doesn't close, then I think your agent has to be reported AND they have to give you the earnest money.
BTW: our MLS took twenty disciplinary actions against agents last month. I don't know how many the Board of Realtors? of the State took . . .?
Source: http://www.zillow.com/advice-thread/Dishonest-Realtor/473578/
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