NEW YORK, Oct. 2, 2015 /PRNewswire/ -- Pomerantz LLP announces that a class action lawsuit has been filed against On Deck Capital, Inc. ("On Deck" or the "Company") (NYSE: ONDK) and certain of its officers. The class action, filed in United States District Court Southern District of New York, and docketed under 15-cv-06126, is on behalf of a class consisting of all persons or entities other than defendants who purchased who purchased or otherwise acquired On Deck securities pursuant and/or traceable to On Deck's Registration Statement and Prospectus issued in connection with the Company's December 16, 2014 initial public offering ("IPO"). This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1933 (the "1933 Act").
If you are a shareholder who purchased On Deck securities during the Class Period, you have until October 5, 2015 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at [email protected] or 888.476.6529 (or 888.4-POMLAW), toll free, ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and number of shares purchased.
On Deck provides financing products to small businesses in the United States. It offers fixed term loans and revolving lines of credit. The Company processes and services its loans through its online platform.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operational and compliance policies. Specifically, defendants made false and/or misleading statements and/or failed to disclose that: (1) the true rate of default for the Company's loan portfolio was steadily increasing; (2) the true value of the Company's loan portfolio was in material decline; and (3) as a result of the foregoing, On Deck's public statements were materially false and misleading at all relevant times.
On December 15, 2014, On Deck filed its amended Registration Statement for the IPO, which became effective on December 17, 2014. Pursuant to the IPO, 11,500,000 shares of On Deck common stock were sold—including 1,500,000 shares purchased by the Underwriter Defendants (as defined infra at ¶ 30) pursuant to exercise of their over-allotment option—at the price to the public of $20.00 per share. The gross proceeds of the IPO were $230 million. On Deck's common stock began trading on the NYSE under the symbol "ONDK" on December 17, 2014.
On February 11, 2015, less than two months after the IPO, SeekingAlpha.com published an article entitled, "On-Deck Capital: Bad Loans, Bad Interest Rates, Bad Business Plan." The article described, in part, how the Company's Registration Statement significantly understated the default rate for the Company's loan portfolio.
On March 18, 2015, Compass Point Research & Trading, LLC ("Compass Point") published a research report (the "Compass Point Report") that detailed concerns with On Deck's business model, including inherent risks surrounding an untested credit model, growing competition, uncertainty with regard to interest rates, and anticipated regulatory threats, all of which created a risky environment for On Deck investors. On Deck's unsustainable business model, according to the Compass Point Report, could ultimately lead to slower growth and higher expenses. Accordingly, Compass Point assigned a "Sell" rating to On Deck stock.
On July 1, 2015, barely six months after the IPO, On Deck common stock dropped to a low of $11.15 per share, a decline of over 40% from the IPO price and of over 60% from its almost $29 per share high on December 18, 2014. The significant drop in share price came after news reports of rising default rates in On Deck's loan portfolios and declining value of its business model. The Company is now reportedly losing tens of millions of dollars through defaults on its loans, likely due to the company's reliance on stated income and data from third-party sources, which may contain inaccuracies.
The Pomerantz Firm, with offices in New York, Chicago, Florida, and Los Angeles, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 70 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.
SOURCE Pomerantz LLP