NEW YORK, Aug. 07, 2020 (GLOBE NEWSWIRE) -- Wolf Haldenstein Adler Freeman & Herz LLP announces that a federal class action securities lawsuit has been filed in the United States District Court for the Central District of California on behalf of all persons or entities that purchased Velocity Financial, Inc. ("Velocity" or the "Company") (NYSE: VEL) pursuant to the Company's January 2020 initial public stock offering ("IPO").
All investors who purchased American Depositary Shares (“ADSs”) of Velocity Financial, Inc. and incurred losses are urged to contact the firm immediately at classmember@whafh.com or (800) 575-0735 or (212) 545-4774.
On January 22, 2020, Velocity sold 7,250,000 shares of stock in its initial public stock offering at $13.00 per share, raising $94,250,000 in new capital.
In its IPO offering documents, Velocity touted it "ha[d] developed the highly-specialized skill set required to effectively compete in this market" and that this allowed Velocity to have "a durable business model capable of generating attractive risk-adjusted returns for [its] stockholders throughout various business cycles." However, Velocity's offering documents failed to disclose that many of Velocity's loans were in non-accrual status and at least 90 days past due by the time of its IPO.
Velocity's true financial condition was revealed on May 13, 2020, when Velocity released its financial results for the first quarter of 2020, revealing that its net income decreased 50% sequentially during the first quarter to just $2.6 million and that its proportion of non-performing loans had accelerated to $174 million, nearly double the unpaid principal amount year-over-year. Velocity later revealed that by April 2020, non-performing loans accounted for 9.9% of the Company's total portfolio, which was expected, but not disclosed in the offering materials.
On this news, Velocity's share price fell more than 80%, to close at just $2.53 per share on May 15, 2020.
Wolf Haldenstein has extensive experience in the prosecution of securities class actions and derivative litigation in state and federal trial and appellate courts across the country. The firm has attorneys in various practice areas; and offices in New York, Chicago and San Diego. The reputation and expertise of this firm in shareholder and other class litigation has been repeatedly recognized by the courts, which have appointed it to major positions in complex securities multi-district and consolidated litigation.
If you wish to discuss this action or have any questions regarding your rights and interests in this case, please immediately contact Wolf Haldenstein by telephone at (800) 575-0735, via e-mail at classmember@whafh.com, or visit our website at www.whafh.com.
Contact:
Wolf Haldenstein Adler Freeman & Herz LLP
Kevin Cooper, Esq.
Gregory Stone, Director of Case and Financial Analysis
Email: gstone@whafh.com, kcooper@whafh.com or classmember@whafh.com
Tel: (800) 575-0735 or (212) 545-4774
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