Philadelphia, Pennsylvania--(Newsfile Corp. - February 24, 2023) - A securities fraud class action on behalf of loanDepot, Inc. (NYSE: LDI) shareholders has partially survived a motion to dismiss.
Plaintiffs' claims in the underlying action stem from three events. First, it is alleged that in the run-up to the IPO, loanDepot engaged in an undisclosed scheme to close loans without the required documentation, in violation of regulations, laws, and contractual provisions. Second, it is alleged that loanDepot improperly collected double daily interest from refinance borrowers and, upon discovery of the erroneous double collection, made the decision to refund customers only in states with active attorneys general. Finally, it is alleged that loanDepot experienced declining gain-on-sale margins as the IPO approached.
The court in the underlying case found that plaintiffs allegations "adequately supports an inference that loanDepot engaged in a concerted effort to close loans without sufficient documentation" and "Plaintiffs have sufficiently alleged wrongdoing in loanDepot's loan origination procedures to survive the motion to dismiss stage." Moreover "Plaintiffs have pleaded sufficient facts showing that members of management . . . knew that at least some of [these] allegations had merit." Here, "Plaintiffs have alleged a sufficient causal connection between the fraud and the drop in stock prices to show proximate causation at this stage of the litigation."
Current shareholders who have held loanDepot stock since before March 16, 2021, can seek corporate reforms, the return of funds spent defending litigation back to the company, and a court approved incentive award, at no cost to them.
If you would like to learn more about this matter, you are encouraged to visit https://grabarlaw.com/the-latest/loandepot-shareholder-investigation/, contact us at jgrabar@grabarlaw.com, or call 267-507-6085.
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Contact:
Joshua H. Grabar, Esq.
Grabar Law Office
One Liberty Place
1650 Market Street, Suite 3600
Philadelphia, PA 19103
Tel: 267-507-6085
Email: jgrabar@grabarlaw.com
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/156067
