Hercules Capital Faces Securities Class Action as Firms Court Investors

Overview

• Hercules Capital is the target of a filed securities class action covering purchasers between May 2025 and February 2026, and multiple plaintiff firms are urging investors to come forward.
• The complaint says the company overstated how much due diligence it did on loan sourcing and portfolio valuation and misclassified holdings, which it says inflated reported valuations.
• Investor notices stress that no class has been certified, that investors can choose their own lawyer or remain absent class members, and that any recovery would be on a contingency basis.
• A separate media report cited by one firm alleged copycat deal sourcing, a small four-person valuation team with limited checks, and the labeling of some software lenders outside the software category.
• That report said investors were hurt when concerns reached the market and noted a one-day share drop of 7.9%, and the case now moves through early procedural steps that could draw wider scrutiny to how business development companies value loans.