Overview
- Multiple plaintiff firms have sent notices urging investors to join or move to be lead plaintiff, and the deadline to file for lead status is June 8, 2026.
- The complaint says Upstart's Model 22 frequently overreacted to negative macroeconomic signals and that the company overstated the model's overall accuracy.
- Plaintiffs allege Model 22's conservative credit assessments materially depressed Upstart's revenue and made the company's 2025 revenue guidance unreliable.
- The suit asserts violations of Sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5, but the case is at an early procedural stage with no class certified and the merits untested.
- If the litigation proceeds past early hurdles, it could increase market and regulatory scrutiny of AI-driven lending and raise questions about how firms must disclose model performance.