Berger Montague Urges Open Lending Investors to Join Class Action Due by June 2025

Legal Alert for Investors in Open Lending Corporation

In a significant development for shareholders of Open Lending Corporation (NASDAQ: LPRO), Berger Montague PC, a well-regarded law firm specializing in securities class action litigation, has issued a call for investors who incurred substantial losses to explore their options for participation in a recently filed class-action lawsuit. This legal action focuses on investors who purchased Open Lending securities from February 24, 2022, to March 31, 2025 – a period marked by serious misrepresentations as outlined in the complaint.

Background on Open Lending Corporation

Headquartered in Austin, Texas, Open Lending provides auto lenders with a cloud-based platform aimed at enhancing the efficiency and security of auto loans. Their services include risk-based pricing models and profit-sharing revenue models. However, allegations suggest that the company misrepresented the performance and risks associated with their loan portfolios, leading to significant investor losses.

The Class Period and Allegations

The class period in question spans from February 24, 2022, through March 31, 2025. During this time, it is alleged that Open Lending's management made numerous misrepresentations:

1. Risk-based Pricing Models: The company purportedly misrepresented the robustness of its pricing models to investors, failing to disclose crucial flaws.
2. Profit Share Revenue: Investors were misled regarding the expected revenue streams from profit-sharing arrangements.
3. Vintage Loan Performance: There was a failure to disclose that vintage loans from 2021 and 2022 were not performing as expected, leading to significant underperformance and losses.
4. Underperformance of New Loans: The company's 2023 and 2024 loans were also understated regarding their performance, contributing further to investor concerns.

The situation escalated on March 17, 2025, when Open Lending announced they could not file their Annual Report on time due to issues with accounting practices related to profit share revenue. Following the announcement, the company’s shares dropped by 9%, reflecting the market's reaction to the developing news.

Further compounding the issues, on March 31, 2025, Open Lending reported alarming financial results for the fourth quarter and full year of 2024, revealing a staggering quarterly revenue loss of $56.9 million attributed to a significant dip in estimated profit share revenues. This downturn was largely associated with heightened delinquencies and defaults among borrowers, particularly affecting the vintage loans from 2021 to 2024.

In response to these revelations, the company also appointed new executive leadership in hopes of reviving investor confidence amidst the turmoil. Unfortunately, the market's reaction was swift; Open Lending's stock fell to $1.17 per share, marking a 57% decrease in value by April 1, 2025.

How to Participate and Your Rights

Investors affected by these developments are urged to consider their legal rights and may take action by filing to become lead plaintiff representative in this securities fraud class action by June 30, 2025. A lead plaintiff typically is an investor or a small group of investors who have the largest financial stake in the class and are representative of the larger group. Those interested in participating can either reach out to Berger Montague directly or consult their own legal counsel to evaluate their options.

It's essential to understand that participation in this class action does not require prior communication with counsel; merely being a member of the affected group places investors into consideration without formal movements on their end.

Berger Montague – A Pioneer in Securities Litigation

With a history dating back to 1970, Berger Montague has been a steadfast advocate for individual and institutional investors across various high-stakes securities class actions. With offices across major U.S. cities, they have earned a reputation as leaders in this field.

For further assistance or to learn your rights, you can contact Berger Montague’s Andrew Abramowitz at [email protected] or call (215) 875-3015, or connect with Peter Hamner at [email protected].

As companies navigate complex financial landscapes, the risks to investors often escalate, making staying informed on potential legal actions crucial for protecting economic interests.