Upstart Holdings Inc. is facing a class-action lawsuit alleging the fintech company and its officers violated federal securities laws by making misleading statements about its AI-powered lending model. The lawsuit was filed by investor-rights law firm Bronstein, Gewirtz & Grossman, LLC.
"Our practice centers on restoring investor capital and ensuring corporate accountability, which serves to uphold the essential integrity of the marketplace," Peretz Bronstein, Founding Partner of Bronstein, Gewirtz & Grossman, LLC, said in a statement regarding their practice.
The complaint alleges that Upstart overstated the capabilities of its "Model 22" AI underwriting system. Specifically, the suit claims the model overreacted to negative macroeconomic signals, was not as accurate as presented, and its conservative credit assessments negatively impacted revenue, rendering the company's full-year 2025 revenue guidance unreliable. The lawsuit covers all individuals and entities that purchased Upstart securities between May 14, 2025, and November 4, 2025.
The legal action seeks to recover damages for investors who suffered losses during the class period. The deadline for investors to request appointment as lead plaintiff is June 8, 2026. This lawsuit follows similar actions the law firm has filed against other companies like Phreesia Inc. and Regencell Bioscience Holdings Ltd., citing misleading statements to investors.
The lawsuit against Upstart introduces significant legal and financial uncertainty for the company. Investors will be watching for the company's official response and any developments in the case leading up to the June 8 lead plaintiff deadline.
This article is for informational purposes only and does not constitute investment advice.
