#USA #Minneapolis #Edelson Lechtzin #securities violations #Sezzle Inc.

Investigation Alert: Sezzle Inc. Under Scrutiny

Edelson Lechtzin LLP has announced an investigation into potential violations of federal securities laws concerning Sezzle Inc. (NASDAQ: SEZL). The law firm is looking into claims that the company may have misled investors about its business practices.

Background on Sezzle Inc.

Sezzle, a financial technology powerhouse headquartered in Minneapolis, operates in the U.S. and Canada, offering consumers a unique payment platform. The service allows customers to make purchases via interest-free installment plans at various online retailers, making it increasingly popular in the expanding buy-now-pay-later sector. However, despite its initial success, recent developments signal troubling times for the company.

Allegations of Misconduct

On December 18, 2024, Hindenburg Research released a report detailing its concerns about Sezzle’s sustainability. The report titled, "Sezzle: A Failing 'Buy Now, Pay Later' Platform Playing Short-Term Tricks as Insiders Cash Out via Stock Sales and Margin Loans," paints a grim picture of the company's current and future activities. Multiple troubling factors were highlighted:

• - Diminishing Merchant Base: Sezzle claims to have seen a significant drop in its active merchants—by an alarming 51% since 2021, indicating a possible loss of market favor within the retail space.
• - Eroding Customer Count: The number of customers using Sezzle has also declined by 20%, raising questions about its attractiveness to consumers in a competitive landscape.
• - High Rates and Credit Losses: The company relies on high-interest borrowing to fund loans for at-risk consumers, contributing to increasing credit losses. This financial strategy poses significant risks to both the customer base and the company's long-term viability.
• - Concerns Over Insider Trading: Disturbingly, reports have revealed that insiders at Sezzle sold approximately $71 million worth of stock while the CEO pledged $542 million in Sezzle shares as collateral for margin loans—this figures about 30% of the company's total shares.
• - Customer Complaints: In addition to these financial concerns, Sezzle has faced nearly 1,000 complaints about unauthorized enrollments in their subscription services, resulting in a dismal 1.1-star rating on the Better Business Bureau (BBB).

Call to Action for Investors

In light of these allegations, Edelson Lechtzin LLP encourages anyone who has invested in Sezzle and has experienced substantial losses, as well as those who have additional information to contribute to the investigation, to come forward. Interested individuals can reach out to attorney Eric Lechtzin of the law firm at 844-563-5550 ext. 1 or via email at [email protected] This may represent a critical opportunity for affected investors to seek recourse in light of the alleged misleading information.

About Edelson Lechtzin LLP

Edelson Lechtzin LLP is a national class-action law firm with extensive experience in securities and investment fraud cases. With offices in Pennsylvania and California, the firm is committed to ensuring justice for affected investors through diligent investigations and legal representation.

Conclusion

As the investigation unfolds, stakeholders in Sezzle Inc. must remain vigilant. Transparency and ethical practices in financial services are vital for maintaining investor trust and the overall health of the market. Keeping abreast of developments surrounding this case will be essential for those with a vested interest in Sezzle's future.