Upstart investors face June 8 deadline in securities class action
Investors who purchased Upstart Holdings, Inc. securities between May 14, 2025 and November 4, 2025 must act by June 8, 2026 to participate in a federal securities class action. The lawsuit alleges the company made false statements about its AI model, Model 22, overstating its accuracy and leading to unreliable revenue guidance. Following a revenue miss and guidance cut in Q3 2025, the stock price fell 9.71%. Investors can contact The Rosen Law Firm to join the class or seek lead plaintiff status.
*this image is generated using AI for illustrative purposes only.
Investors in Upstart Holdings, Inc. who purchased securities between May 14, 2025 and November 4, 2025 must act before the June 8, 2026 lead plaintiff deadline to participate in a federal securities class action. The lawsuit alleges that the company made false and misleading statements regarding its AI model, Model 22, and its impact on revenue guidance. Investors seeking to serve as lead plaintiff must move the Court no later than June 8, 2026.
Allegations Against Upstart Holdings
The complaint claims that throughout the Class Period, defendants failed to disclose that Model 22 frequently overreacted to negative macroeconomic signals during risk-separation processes. Consequently, the model's overall accuracy and propensity to increase loan approval rates were allegedly overstated. The lawsuit further alleges that Model 22's overly conservative assessment of credit and macroeconomic conditions negatively impacted Upstart's revenue results, rendering its previously issued full year 2025 revenue guidance unreliable.
Financial Impact and Stock Performance
The truth emerged on November 4, 2025, when Upstart reported its financial results for the third quarter of 2025. Upstart reported Q3 2025 revenue of $277 million, missing its previously issued Q3 2025 revenue guidance of approximately $280 million and consensus estimates by $2.62 million. The company expected to generate revenue of only $288 million in the fourth quarter of 2025, significantly below consensus estimates of $303.7 million. Upstart negatively revised its FY 2025 revenue guidance to approximately $1.035 billion, versus the $1.06 billion consensus estimate and its prior guidance of approximately $1.055 billion. Following these disclosures, Upstart's stock price fell $4.49 per share, or 9.71%, to close at $41.75 per share on November 5, 2025.
Key Dates and Deadlines
| Event | Date |
|---|---|
| Class Period Start | May 14, 2025 |
| Class Period End | November 4, 2025 |
| Lead Plaintiff Deadline | June 8, 2026 |
Investor Options and Counsel Selection
Investors may choose to serve as lead plaintiff, representing other class members in directing the litigation, or remain an absent class member. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice. The ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not. To join the class action or seek further information, investors can contact The Rosen Law Firm, P.A. by visiting https://rosenlegal.com/submit-form/?case_id=58653 or calling Phillip Kim, Esq. toll-free at 866-767-3653 or emailing case@rosenlegal.com .
How will Upstart adjust its AI risk models to prevent similar overreactions to macroeconomic signals in the future?
What are the potential long-term reputational and financial impacts on Upstart's partnerships with lending banks due to the model's inaccuracies?
Will the alleged misstatements regarding Model 22 trigger regulatory scrutiny from the SEC or other financial oversight bodies?
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