UPST Investor Alert: Upstart Holdings Securities Fraud Lawsuit - Investors With Losses May Seek To Lead The Class Action After Executives Allegedly Certified False AI Claims: Levi & Korsinsky

(MENAFN- GlobeNewsWire - Nasdaq) Important Information Regarding Section 20(a) Individual Liability Claims

NEW YORK, April 27, 2026 (GLOBE NEWSWIRE) -- Levi & Korsinsky, LLP alerts investors in Upstart Holdings, Inc. (NASDAQ: UPST) of a pending securities class action. Class Period: May 14, 2025 through November 4, 2025. Find out if you qualify to recover losses or contact Joseph E. Levi, Esq. at ... | (212) 363-7500.

Four senior officers of Upstart Holdings are named as individual defendants in a securities class action filed in the United States District Court for the Northern District of California. Shares fell $4.49 per share, or 9.71%, after the Company revealed its flagship AI underwriting model had been overreacting to macroeconomic signals and reducing loan approvals throughout the quarter. The Court has set June 8, 2026 as the deadline to apply for lead plaintiff appointment.

The Named Individual Defendants

The complaint identifies the following individuals as controlling persons of Upstart who bear personal liability under Section 20(a) of the Securities Exchange Act of 1934:

• Dave Girouard -- CEO, Chairperson of the Board, and Co-founder. Girouard sold 208,335 shares during the Class Period, generating proceeds exceeding $13.5 million while the Company allegedly concealed Model 22's deficiencies.
• Sanjay Datta -- CFO, President, and Chief Capital Officer. Datta sold 26,985 shares during the Class Period, reaping over $1.4 million in proceeds.
• Paul Gu -- CTO, Co-founder, and Director, incoming CEO effective May 1, 2026. Gu sold 5,000 shares during the Class Period for proceeds exceeding $344,000.
• Chantal Rapport -- Chief Marketing Officer and SVP of Growth.

The lawsuit contends each defendant possessed the power and authority to control the contents of Upstart's SEC filings, press releases, and market communications throughout the Class Period.

Section 20(a) Control Person Framework

Section 20(a) imposes joint and several liability on every person who directly or indirectly controlled a person liable under Section 10(b). As alleged, each Individual Defendant had access to material non-public information about Model 22's overresponsiveness and its negative impact on loan approval rates, conversion rates, and revenue forecasts. Despite this knowledge, the action asserts they permitted materially misleading statements to reach the investing public.

Sarbanes-Oxley Certification Obligations

The complaint alleges Defendants Girouard and Datta signed SOX certifications under Sections 302 and 906 appended to Upstart's Q2 2025 Form 10-Q, certifying that the filing did not contain any untrue statement of material fact or omit to state a material fact. The complaint further charges that these certifications were false because Model 22 was already exhibiting the overresponsive behavior that would later cause the Company to miss its own guidance and slash its FY 2025 revenue outlook by $20 million.

"Corporate officers have a duty to ensure their companies' public statements are accurate and complete. When executives sign SOX certifications attesting to the accuracy of financial disclosures while allegedly aware of material model deficiencies affecting revenue, they may bear personal responsibility for resulting shareholder losses." -- Joseph E. Levi, Esq.

Scienter Allegations

The complaint alleges that the Individual Defendants' insider stock sales during the Class Period, totaling over $15.2 million in combined proceeds, support an inference of scienter. As averred, Defendant Gu later admitted on the Q3 2025 earnings call that management had been "knowingly making a choice" to calibrate the model conservatively, while Defendant Girouard acknowledged Model 22 had been "overreacting" to macro signals.

Speak with an attorney about your options for recovery or call (212) 363-7500.

About Levi & Korsinsky, LLP

Levi & Korsinsky, LLP -- Top 50 securities litigation firm (ISS, seven consecutive years). Over 70 professionals. Hundreds of millions recovered.

Frequently Asked Questions About the UPST Lawsuit

Q: Who are the defendants named in the UPST lawsuit? A: The complaint names Upstart Holdings, Inc. and individual defendants including CEO Dave Girouard, CFO Sanjay Datta, CTO Paul Gu, and CMO Chantal Rapport. It asserts Girouard and Datta signed Sarbanes-Oxley certifications and that all the Individual Defendants made public statements and are further alleged to have controlled the contents of Upstart's SEC filings.

Q: What is the UPST class action lawsuit about? A: A securities class action has been filed against Upstart Holdings, Inc. (NASDAQ: UPST) alleging materially false and misleading statements between May 14, 2025 and November 4, 2025. Shares fell approximately 9.71% after the truth was revealed, causing significant losses for shareholders.

Q: What is a lead plaintiff and why does it matter?A: A lead plaintiff is the investor appointed by the court to represent the entire class. Lead plaintiffs are typically investors with the largest documented losses. Being appointed does not increase individual recovery but gives direct oversight of how the case is run.

Q: What does it cost me to participate? A: Nothing. Securities class actions are handled on a pure contingency basis. No upfront fees, no retainer, no out-of-pocket costs.

Q: What if I already sold my UPST shares -- can I still recover losses? A: Yes. Eligibility is based on when you purchased, not whether you still hold them. Investors who bought during the class period and sold at a loss may still participate.

Q: What do UPST investors need to do right now? A: Gather brokerage records including purchase dates, share quantities, and prices paid. Contact Levi & Korsinsky for a free, no-obligation evaluation at ... or (212) 363-7500. No immediate action is required to remain eligible as a class member.

Q: How long will the lawsuit take to resolve? A: Securities class actions typically take two to four years from initial filing to resolution.

CONTACT:

Levi & Korsinsky, LLP

Joseph E. Levi, Esq.

Ed Korsinsky, Esq.

33 Whitehall Street, 27th Floor

New York, NY 10004

...

Tel: (212) 363-7500

Fax: (212) 363-7171

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