Open Lending Corporation (LPRO) Class Action Lawsuit and Its Implications for Retail Investors

The Open Lending Corporation (NASDAQ: LPRO) is embroiled in a high-stakes securities class action lawsuit that underscores critical red flags in financial reporting and raises urgent questions for retail investors. The case, which alleges the company misled investors about its risk-based pricing models, profit share revenue, and the deteriorating performance of its loan portfolios, has already triggered a catastrophic 57% stock collapse in just two months. With a June 30, 2025, deadline to seek lead plaintiff status, investors who held LPRO during the Class Period (February 24, 2022, to March 31, 2025) must act swiftly to protect their interests.

The Red Flags: Misstatements and Hidden Risks

At the core of the lawsuit are allegations that Open Lending misrepresented its financial health through three critical omissions and falsehoods:

1. Profit Share Revenue Deception: The company purportedly inflated its revenue projections by overstating the performance of its “profit share” model, which relies on loans originated through its platform. When borrowers defaulted or underperformed, the company allegedly delayed disclosing the resulting revenue shortfalls.

2. Vintage Loan Deterioration: Loans originated in 2021 and 2022 (the “vintage” portfolios) lost significant value, with their worth dropping by 40% below their outstanding balances. This decline was not disclosed until March 2025, when Open Lending finally revealed a $56.9 million quarterly loss tied to these deteriorating loans.

3. 2023-2024 Loan Underperformance: Loans from more recent vintages also underperformed due to flawed borrower selection criteria, such as targeting borrowers with “credit builder tradelines” or fewer positive credit histories. This accounted for another 40% of the total profit share revenue decline.

Leadership Changes and Stock Collapse

The allegations culminated in a March 31, 2025, bombshell: Open Lending replaced its CEO, COO, and CFO—Charles D. Jehl—amid revelations of a $144 million net loss driven by deferred tax asset write-downs. The stock price, already pressured by a 9% drop on March 17, 2025, following delayed accounting disclosures, plummeted an additional 57% by April 1 to $1.17—a stark illustration of investor distrust.

Legal Timeline and Investor Urgency

The lawsuit, Bradley v. Open Lending Corporation (No. 25-cv-00650, W.D. Tex.), has drawn law firms with a proven track record of securities litigation recoveries. For example, Robbins Geller (800/449-4900) claims $2.5 billion in recoveries in 2024 alone. Investors who held LPRO during the Class Period must file by June 30, 2025, to seek lead plaintiff status—a role that carries influence over litigation but is not required to qualify for any eventual settlement.

Why Act Now?

• Recovery Potential: Even small investors may qualify for a pro rata share of any settlement.
• Contingency Fees: Law firms work on a contingency basis, so there's no upfront cost.
• Deadline Risk: Missing the June 30 cutoff could mean forfeiting eligibility entirely.

The Bigger Picture: Red Flags for Retail Investors

This case serves as a cautionary tale about scrutinizing financial reports for red flags like:
- Delayed Disclosures: Open Lending's delayed accounting for loan performance raises questions about transparency.
- Overreliance on Specific Metrics: Profit share revenue, while a standard model for fintechs, requires rigorous scrutiny of underlying loan quality.
- Leadership Turnover: Sudden C-suite changes amid financial turmoil often signal deeper problems.

Investment Advice

If you held LPRO between February 2022 and March 2025:
1. Contact a Law Firm: Reach out to Berger Montague (215-875-3015), Robbins Geller, or Rosen Law (866-767-3653) to inquire about your rights.
2. Document Holdings: Gather trade confirmations and calculate losses to support any potential claim.
3. Avoid Further Risk: Do not reinvest in LPRO until the lawsuit resolves, given its volatile stock trajectory.

Conclusion

The Open Lending case exemplifies how misrepresentations in financial reporting can erode investor confidence—and why vigilance and timely action are critical. With a deadline looming, affected investors must act now to preserve their rights. For others, it's a reminder to dig deeper into companies' core metrics and watch for leadership shifts that signal underlying instability.

The clock is ticking—and so is the market.