Dual Agency and Multiple Offers - Ethical? What are your thoughts?

Here is the scenario . . . 

Home listed, buyer agent puts offer in.  Listing agent says, we have multiple offers and will be reviewing soon.  Days later, Listing agents sends email, sorry your offer was 2nd best and we chose the best offer.  Buyer agent's response is thank you and good luck with your contract.   Weeks later . . . . buyer sees online that the property has sold and it was $1000 more than his offer.  buyer calls buyer agent and asks if they used our offer to bid a higher offer?  Buyer agent looks into it, agent did a dual agency and closed on the contract.  With the knowledge of buyer agent offer . . . the listing agent's contract was $1000 more.  Also, this property was on market for over 155 days before this happened. Not a sought after property but a property that needed work.  So was the multiple offers only the 2 offers? Not sure if it was but buyer wants to file a complaint. This is in Maryland where dual agency is frowned upon and the listing agent is the Broker of the company