#United States #Class Action #Austin #Berger Montague #Open Lending

Berger Montague Launches Class Action Against Open Lending Corporation

In a significant legal move, Berger Montague PC has initiated a class action lawsuit against Open Lending Corporation for alleged securities fraud. This lawsuit impacts all investors who purchased Open Lending securities between February 24, 2022, and March 31, 2025. The allegations raise serious concerns regarding the company's financial disclosures and the reliability of its investment projections.

Background of Open Lending Corporation

Open Lending is based in Austin, Texas, and specializes in providing loan services for auto lenders through its unique cloud-based platform. As a company listed on NASDAQ under the ticker symbol LPRO, it has garnered the interest of investors looking to capitalize on innovations in the auto lending market.

However, the recent developments surrounding Open Lending have shifted the focus from growth potential to potential legal ramifications. According to the lawsuit, there were several critical misstatements made by the company during the class period that investors should be concerned about. These misrepresentations involve the company's risk-based pricing models and profit share revenues, which may have misled investors about the actual financial health of Open Lending.

Allegations Detailed in the Lawsuit

The heart of the complaint highlights the following issues:
1. Misrepresentation of Pricing Models: The defendants allegedly provided misleading information about how their risk-based pricing models functioned.
2. Profit Share Revenue Discrepancies: Investors were misled regarding the company's profit share revenue, raising suspicions about the transparency of Open Lending's earnings.
3. Valuation of Vintage Loans: Claims were made that Open Lending failed to disclose that the loans generated in 2021 and 2022 were worth considerably less than their reported balances.
4. Underperformance of Recent Loans: The company allegedly misrepresented the performance of loans issued in 2023 and 2024, suggesting these investments were safer than they turned out to be.

The company initially disclosed these issues to the public on March 17, 2025, stating it required more time to complete its financial reporting for the year. Following this announcement, Open Lending's stock price saw a significant drop, evidencing the negative impact of the revelations on investor confidence.

On March 31, subsequent financial results were released, unveiling a shocking quarterly revenue figure: a negative $56.9 million. The report attributes this to an $81.3 million reduction in estimated profit share revenues due to increasing delinquencies on loans from past vintages. This downturn in financial performance led to a marked decline of 57% in stock value a day later, indicating that the market reacted severely to the company's deteriorating financial outlook.

What Investors Need to Know

Investors who acquired Open Lending securities during the specified class period are encouraged to consider their legal options before the upcoming class action deadline on June 30, 2025. They can seek to become lead plaintiffs, which allows them to play a key role in the ongoing litigation aimed at recovery for losses incurred from the alleged securities fraud.

Berger Montague has a longstanding reputation in securities class action litigation, having represented countless investors since its establishment in 1970. For those seeking further information or wishing to discuss their legal rights regarding the Open Lending case, contacting Berger Montague is advisable.

Conclusion

The developments surrounding Open Lending Corporation underscore the importance of transparent financial reporting and the potential consequences of failing to uphold these standards. As the situation unfolds, both current and potential investors should remain informed and engaged. Berger Montague is prepared to advocate for the rights of investors adversely affected by this case, reinforcing the legal framework that protects investors from corporate misrepresentation.