“Open Lending Faces Rising Securities Fraud Lawsuit: What Investors and Credit Unions Need to Know by June 2025”

Open Lending Corporation Faces Major Securities Fraud Lawsuit as Investors Seek Lead Plaintiff

A significant securities fraud class action lawsuit against Open Lending Corporation (NASDAQ: LPRO) is gaining momentum as multiple law firms encourage affected investors to come forward before the June 30, 2025 deadline. The lawsuit, filed in the Western District of Texas and captioned Bradley v. Open Lending Corporation (No. 25-cv-00650), alleges that the Austin-based company and several executives violated the Securities Exchange Act of 1934 during a period spanning from February 24, 2022, through March 31, 2025.

Open Lending, which provides lending enablement and risk analytics solutions to credit unions and other financial institutions, is facing allegations of misrepresenting its risk-based pricing models and misleading investors about profit share revenue. According to Berger Montague PC, the company failed to disclose that loans originated in 2021 and 2022 had become worth significantly less than their outstanding balances.

Timeline of Events Leading to the Lawsuit

The legal troubles for Open Lending began to surface publicly on March 17, 2025, when the company announced it would be unable to file its 2024 Annual Report on time. The company stated it “require[d] additional time to finalize its accounting and review processes specifically related to its profit share revenue and related contract assets.” This announcement triggered an immediate market reaction, with the company’s share price falling $0.40 (9.28%) to close at $3.91 on unusually heavy trading volume. The decline continued the following day with an additional drop of $0.42 (10.87%), closing at $3.49.

The situation deteriorated further on March 31, 2025, when Open Lending released its fourth quarter and full year 2024 financial results. The report revealed a quarterly revenue of negative $56.9 million, largely attributed to “a $81.3 million reduction in estimated profit share revenues related to business in historic vintages.” The company disclosed this was “primarily due to heightened delinquencies and corresponding defaults associated with loans originated in 2021 through 2024.”

Adding to investor concerns, Open Lending reported a net loss of $144 million, which included a $86.1 million valuation allowance on deferred tax assets. Simultaneously, the company announced immediate executive changes, appointing both a new CEO and COO to replace Charles D. Jehl, who had been serving in multiple executive roles including CEO, COO, and CFO. Following these revelations, Open Lending’s stock plummeted nearly 58%.

Multiple Law Firms Pursuing Action

Several prominent law firms have announced their involvement in the class action, each encouraging investors who purchased Open Lending securities during the specified period to consider serving as lead plaintiff. Law Offices of Howard G. Smith was among the first to announce the lawsuit, highlighting the June 30, 2025 deadline for investors to file a lead plaintiff motion.

Robbins Geller Rudman & Dowd LLP, a firm that claims to have recovered over $2.5 billion for investors in securities-related class action cases in 2024 alone, is also actively seeking potential lead plaintiffs. The firm, which boasts 200 lawyers across 10 offices, highlights its track record of securing the largest securities class action recoveries in history.

The Schall Law Firm announced its involvement on June 9, 2025, encouraging investors to contact them regarding the opportunity to lead the securities fraud lawsuit. Similarly, Berger Montague PC has advised affected investors to seek appointment as a lead plaintiff representative before the June 30 deadline.

Implications for Credit Unions

This lawsuit holds particular significance for credit unions, as Open Lending’s business model directly serves these institutions. The company’s platform is designed to help credit unions, regional banks, and other financial companies assess risk and enable lending, particularly in the auto loan sector.

For credit union executives who may be using Open Lending’s services, the allegations raise important questions about the reliability of the company’s risk assessment models. The claimed misrepresentations regarding the company’s risk-based pricing models could potentially affect how credit unions evaluate their partnerships with financial technology providers.

The allegations that Open Lending’s 2021 through 2024 vintage loans experienced “heightened delinquencies and corresponding defaults” should prompt credit unions to review their own loan portfolios, particularly those that may have been originated using similar risk assessment methodologies.

The Lead Plaintiff Process

Under the Private Securities Litigation Reform Act of 1995, investors who purchased or acquired Open Lending securities during the Class Period may seek appointment as lead plaintiff. The lead plaintiff, typically the investor with the greatest financial interest in the relief sought, acts on behalf of all other class members in directing the lawsuit.

Investors considering this role should understand that while serving as lead plaintiff doesn’t require active participation in all aspects of the case, it does come with certain responsibilities. The lead plaintiff helps make important decisions about the case, including whether to accept a settlement offer. However, an investor’s ability to share in any potential future recovery doesn’t depend on serving as lead plaintiff.

For credit union executives who may have directed institutional investments in Open Lending during the Class Period, consulting with legal counsel about potential involvement in the lawsuit would be prudent. The deadline of June 30, 2025, provides a narrow window for decision-making.

Looking Forward

As this legal battle unfolds, credit union executives should closely monitor developments, especially those institutions that have business relationships with Open Lending or similar fintech providers. The allegations in this case highlight the importance of thorough due diligence when partnering with third-party service providers for critical functions like loan risk assessment.

The outcome of this lawsuit could potentially reshape how financial institutions approach risk assessment technologies and vendor relationships in the lending space. For credit unions specifically, this case serves as a reminder of the importance of independently validating the performance claims made by financial technology partners.

With the lead plaintiff deadline approaching on June 30, 2025, affected investors have limited time to evaluate their options and determine whether to seek a more active role in the litigation process. Regardless of individual participation decisions, the industry as a whole will be watching this case closely for its potential broader implications on financial technology partnerships and risk assessment methodologies.