NEW ORLEANS–(BUSINESS WIRE)–Former Attorney General of Louisiana, Charles C. Foti, Jr., Esq., a partner at the law firm of Kahn Swick & Foti, LLC (“KSF”), announces that KSF has commenced an investigation into Upstart Holdings, Inc. (NasdaqGS: UPST).
Throughout 2021, the Company touted its “cloud-based AI lending platform,” that matches potential borrowers with lending partners, as superior to traditional, FICO-based models, due to the platform’s ability to adapt quickly to changing macroeconomic conditions and its rate-insensitivity. The Company’s model would purportedly insulate it from the credit risk associated with the loans themselves, since it would simply facilitate lending, without holding any long-term loans on its balance sheet. However, despite the Company’s assurances, it had gradually been forced to retain an increasing level of loans that had been sold back to it by its banking partners and was unable to repackage and sell to investors, exposing it to interest and credit risk. Then, on November 8, 2022, the Company disclosed a 31% decrease in revenue for Q3 2022 compared to the prior year, and a net loss of $58.1 million, attributed primarily to a substantial decrease in loans generated due to continually rising interest rates, which in turn increased the costs of borrowing and depressed demand for loans.
The Company and certain of its executives have been sued in a securities class action lawsuit, charging them with failing to disclose material information during the Class Period, violating federal securities laws. Recently, the court presiding over that case denied the Company’s motion to dismiss in part, allowing the case to move forward.
KSF’s investigation is focusing on whether Upstart’s officers and/or directors breached their fiduciary duties to its shareholders or otherwise violated state or federal laws.
If you have information that would assist KSF in its investigation, or have been a long-term holder of Upstart shares and would like to discuss your legal rights, you may, without obligation or cost to you, call toll-free at 1-833-938-0905 or email KSF Managing Partner Lewis Kahn (lewis.kahn@ksfcounsel.com), or visit us at https://www.ksfcounsel.com/cases/nasdaqgs-upst/ to learn more.
About Kahn Swick & Foti, LLC
KSF, whose partners include former Louisiana Attorney General Charles C. Foti, Jr., is one of the nation’s premier boutique securities litigation law firms. KSF serves a variety of clients – including public institutional investors, hedge funds, money managers and retail investors – in seeking recoveries for investment losses emanating from corporate fraud or malfeasance by publicly traded companies. KSF has offices in New York, California, Louisiana and New Jersey.
To learn more about KSF, you may visit ksfcounsel.com.
Contacts
Kahn Swick & Foti, LLC
Lewis Kahn, Managing Partner
lewis.kahn@ksfcounsel.com
1-877-515-1850