The Klein Law Firm announces that a class action complaint has been filed on behalf of shareholders of Velocity Financial, Inc. (NYSE: VEL) who purchased shares pursuant and/or traceable to the Registration Statement and Prospectus, as amended, issued in connection with Velocity’s January 2020 initial public offering ("IPO"). The action, which was filed in the United States District Court for the Central District of California, alleges that the Company violated federal securities laws.
In particular, the Velocity lawsuit alleges that defendants failed to disclose that, at the time of Velocity's initial public offering, the Company’s non-performing loans had dramatically increased in size (as measured by both the amount of unpaid principal balance and as a percentage of the Company’s overall loan portfolio) from the figures provided in the Registration Statement and Prospectus that Velocity had issued in connection with the IPO. Further, defendants failed to provide any information to investors regarding the potential impact of the novel coronavirus on Velocity’s business and operations, despite the fact that the international spread of the virus had already been confirmed at the time of the IPO. The failure to disclose the substantial and growing proportion of the Company’s loans that were non-performing and/or on non-accrual status as of the IPO rendered the statements contained in the Registration Statement and Prospectus regarding the quality of the Company’s loan portfolio and underwriting practices materially misleading.
Shareholders have until September 28, 2020 to petition the court for lead plaintiff status. Your ability to share in any recovery does not require that you serve as lead plaintiff. You may choose to be an absent class member.
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