Open Lending Class Action Lawsuit: Breaking: Open Lending Faces Major Class Action Lawsuit From Investors [2025]

The Open Lending Class Action Lawsuit has the investment community reeled as Open Lending’s stock price crashed 57.61% to $1.17 per share. The company’s shocking announcement of negative quarterly revenue at $56.9 million triggered this collapse. The troubles began earlier this year when Open Lending’s stock had already fallen 19.03% after the company failed to file its 2024 Annual Report on schedule.

A class action lawsuit now targets Open Lending with claims of securities fraud and unlawful business practices from February 24, 2022, to March 31, 2025. Investors who bought Open Lending securities during this timeframe can ask to become Lead Plaintiff until June 30, 2025. The Open Lending Lawsuit claims the company misled investors about its risk-based pricing models. On top of that, it failed to reveal major losses tied to loans from 2021 and 2022.

Why Did Open Lending’s Stock Collapse in Early 2025?

Open Lending Corporation’s financial troubles came to light in March 2025 as the company stunned investors with its first quarter results. The company reported negative quarterly revenue of $56.9 million, a figure that triggered immediate market response and the filing of the Open Lending Lawsuit.

Several warning signs preceded this shocking announcement. The company told investors on February 15, 2025 that it couldn’t file its 2024 Annual Report (Form 10-K) on time. The stock dropped 19.03% as investors lost confidence in the market.

We traced the company’s problems to basic flaws in its risk assessment models. Financial analysts pointed out that Open Lending didn’t properly evaluate default risks in its automotive lending platform, especially when you have loans from 2021 and 2022. These models, which the company once praised as sophisticated predictive tools, failed to accurately predict default rates during economic uncertainty.

Weak internal controls kept Open Lending from spotting these issues before they turned into major financial losses. The situation got worse as car loan defaults grew beyond expected rates, and the company had to update years of financial statements.

Markets reacted quickly and harshly. The management tried to calm stakeholders, but Open Lending stock crashed 57.61% in just one trading day. The price fell to $1.17 per share, just a fraction of what it was worth before. This crash stands as one of the biggest single-day drops in the financial technology sector this year.

Big investors who once believed in the company’s new approach to car lending sold their shares faster. Credit rating agencies also lowered Open Lending’s debt ratings because they worried about the company’s survival and cash flow problems.

A class action lawsuit followed these events directly. Plaintiffs claimed in the Open Lending Class Action Lawsuit that company executives either knew or should have known about their faulty risk models but kept making positive public statements about the company’s financial health.

What Are the Core Claims in the Open Lending Lawsuit?

The Open Lending Class Action Lawsuit against Open Lending Corporation focuses on four key allegations that reveal serious issues with the company’s operations and financial reporting.

The first allegation claims Open Lending executives weren’t honest about their risk-based pricing models’ capabilities. These models were the core technology that powered the company’s lending and risk analytics solutions for credit unions and regional banks. The models failed to correctly assess loan default risks.

The second allegation shows Open Lending made misleading claims about its profit share revenue. This became clear after the company reported an $81.30 million reduction in estimated profit share revenues from historic business. This huge drop led to a negative quarterly revenue of $56.90 million.

The third allegation in the Open Lending Lawsuit points out that Open Lending kept quiet about its 2021 and 2022 vintage loans. These loans were worth much less than their outstanding balances. The lawsuit states that investors weren’t told these loans were underwater.

The fourth allegation focuses on how Open Lending wasn’t truthful about its poorly performing 2023 and 2024 vintage loans. The company later admitted there were “heightened delinquencies and corresponding defaults associated with loans originated in 2021 through 2024″.

These issues forced Open Lending to record an $86.10 million valuation allowance on deferred tax assets. This increased their income tax expense and led to a $144.00 million net loss.

The Open Lending Lawsuit states that these failures and cover-ups made Open Lending’s positive statements about its business operations false or unreasonable. Yes, it is worth noting that when this information became public, the company’s stock price crashed, which proved investors’ fears about Open Lending’s business model were right.

What Should Investors Know About Their Legal Options?

Investors who lost money in the Open Lending stock collapse have several legal options. The courts set a deadline of June 30, 2025 for investors who bought Open Lending securities between February 24, 2022, and March 31, 2025. These investors can ask to become lead plaintiffs in the ongoing class action lawsuit.

The good news is that joining this legal action costs nothing upfront. Law firms, like the Law Offices of Timothy L. Miles, take these cases on contingency fees, which means investors don’t pay anything out-of-pocket. This makes it easier for shareholders to seek compensation for their losses.

Lead plaintiffs have specific duties. They represent other class members and guide the litigation process. But you don’t need to be a lead plaintiff to receive money from a potential settlement. You can share in any recovery without taking on this leadership role.

Several top law firms, including the Law Offices of Timothy L. Miles, want to represent investors in this case:

Affected investors should reach out to one of these firms through their websites or phone numbers. (855) 846-6529.  The Private Securities Litigation Reform Act of 1995 lets any investor who bought securities during the class period become a lead plaintiff.

The court hasn’t certified any class yet. This means investors have no representation unless they hire their own lawyer. Anyone looking to protect their rights should act quickly as this legal situation develops faster.

Conclusion: Final Thoughts on the Open Lending Legal Battle

The Open Lending situation serves as a warning for investors in financial markets. This piece shows how a promising fintech company saw its stock price plummet 57.61% after reporting negative quarterly revenue of $56.9 million. The high-profile lawsuit stems from serious allegations about misrepresented risk models and hidden loan losses.

Investors should know the June 30, 2025 deadline is approaching fast. Anyone who bought securities during the class period must take action before this date to seek lead plaintiff status. Notwithstanding that, shareholders can still benefit from potential settlements without paying upfront legal costs through contingency arrangements.

Open Lending’s case reveals a truth about investment risks. Companies can hide problems with their core business models despite sophisticated analytics and positive corporate messaging until devastating financial damage surfaces. This shows why thorough due diligence remains crucial for all investment decisions.

Corporate transparency is the foundation of market trust. The fallout from Open Lending’s alleged failure to meet this simple obligation has hurt both shareholders and broader market confidence. We’ll keep tracking this important case as it moves through the legal system.

Frequently Asked Questions About the Open Lending Class Action Lawsuit

Q1. What triggered the class action lawsuit against Open Lending? The lawsuit was triggered by a dramatic 57.61% stock price drop following the company’s report of negative quarterly revenue of $56.9 million. Allegations include misrepresentation of risk-based pricing models and failure to disclose significant losses related to loans originated between 2021 and 2022.

Q2. What is the deadline for investors to join the Open Lending lawsuit? Investors who purchased Open Lending securities between February 24, 2022, and March 31, 2025, have until June 30, 2025, to request appointment as Lead Plaintiff in the ongoing class action lawsuit.

Q3. Do investors need to pay upfront to participate in the lawsuit? No, investors do not need to pay upfront to participate. Multiple law firms are handling these cases on contingency fee arrangements, meaning investors only pay if there’s a successful recovery.

Q4. What are the main allegations in the Open Lending lawsuit? The main allegations include misrepresentation of risk-based pricing models, misleading statements about profit share revenue, failure to disclose the diminished value of 2021 and 2022 vintage loans, and misrepresentation of the underperformance of 2023 and 2024 vintage loans.

Q5. Do investors need to be lead plaintiffs to benefit from a potential settlement? No, investors do not need to serve as lead plaintiffs to benefit from any potential recovery. Your ability to share in any settlement doesn’t require taking on this leadership role.

Contact Timothy L. Miles Today About an Open Lending Class Action Lawsuit