Upstart Holdings, Inc. Lawsuit - Why Investors Are Suing

Investigation

Continous Holding
November 9, 2021 to May 9, 2022

Proposed Claim
Securities Violation

Has Upstart’s management misled shareholders regarding macro environment and the need to originate loans using the company’s balance sheet? Is skepticism on the viability of the company’s business model justified? Following the May 9, 2022, Q1 2022 financial result release, we opened an investigation.

This post is open for investors to gather facts, and findings and track their exposure to related lawsuits. We invite investors and shareholders to contribute to this investigation for their own benefit, add events to the factual timeline below and vote on events’ pertinence.
A lawsuit was subsequently filed. We will update this post as it unfolds.

Initial Lawsuit

An Upstart shareholder filed a securities class action on behalf of persons and entities that purchased or otherwise acquired Upstart securities between November 9, 2021 and May 9, 2022, inclusive.

Filing Date
05/13/2022
Class Period
11/09/2021 to 05/09/2022
Transgression
Securities Violation
Filing Firms
Glancy Prongay & Murray LLP
Case Title
Ward v. Upstart, Inc. et al
Docket Number
5:22-cv-02856
Court
California Northern District Court
Free File
Complaint

Allegations

According to the complaint, defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the company’s business, operations, and prospects. Specifically, defendants allegedly failed to disclose to investors:

(1) that Upstart’s artificial intelligence (AI) model could not adequately account for macroeconomic factors such as interest rates that impact the market-clearing price for loans;
(2) that, as a result, Upstart was experiencing negative impact on its conversion rate;
(3) that, as a result, the company was reasonably likely to use its balance sheet to fund loans; and
(4) that, as a result of the foregoing, defendants’ positive statements about the company’s business, operations, and prospects were materially false and/or misleading and/or lacked a reasonable basis.