PHILADELPHIA, Aug. 5, 2020 /PRNewswire/ -- Berger Montague is investigating potential securities fraud claims on behalf of investors who purchased the common stock of Velocity Financial, Inc. ("Velocity" or the "Company") (NYSE: VEL) issued in connection with Velocity's January 2020 IPO (the "Offering Materials").
If you purchased Velocity shares, have questions concerning your rights or interests, or would like to discuss Berger Montague's investigation, please contact attorneys Michael Dell'Angelo at (215) 875-3080 or Andrew Abramowitz at (215) 875-3015, or contact us at www.bergermontague.com/velocity-financial.
According to the lawsuit, the IPO Offering Materials contained false and/or misleading information and failed to disclose that a significantly higher proportion of its loan portfolio had become non-performing loans (90 days past due). The Offering Materials are also alleged to have failed to include any information regarding the anticipated adverse impact of the coronavirus on the Company's business, operations, or financial performance – conditions which were already known to defendants at the time.
On May 13, 2020, in connection with Velocity's Q1 2020 results, the Company stated that its net income decreased 50% during the quarter to just $2.6 million, and that it had suspended all loan origination, thus effectively halting any potential growth in the Company's loan portfolio. The Company further disclosed that its proportion of non-performing loans had accelerated to $174 million – nearly double the unpaid principal amount year-over-year – and now constituted more than 8% of the Company's total portfolio.
Defendants' belated disclosures have severely harmed investors. As of July 29, 2020, shares had fallen from the IPO price of $13 per share to $3.90 per share in only six months.
If you purchased Velocity shares in connection with the IPO, you may seek Court appointment as lead plaintiff to represent other injured investors in a class action. The lead plaintiff appointment deadline is September 28, 2020. You do not need to be a lead plaintiff to share in any potential Class recovery.
Whistleblowers: Persons with non-public information regarding Velocity Financial, Inc. are encouraged to confidentially assist Berger Montague's investigation or take advantage of the SEC Whistleblower program. Under this program, whistleblowers who provide original information may receive rewards totaling up to thirty percent (30%) of recoveries obtained by the SEC. For more information, contact us.
Berger Montague, with offices in Philadelphia, Minneapolis, Washington, D.C., and San Diego, has been a pioneer in securities class action litigation since its founding in 1970. Berger Montague has represented individual and institutional investors for five decades and serves as lead counsel in courts throughout the United States.
Michael Dell'Angelo, Managing Shareholder Berger Montague (215) 875-3080 [email protected]