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Upstart Holdings, Inc.

(NASDAQ GS: UPST)

Rigrodsky Law, P.A. is investigating potential claims against the officers and directors of Upstart Holdings, Inc. ("Upstart" or the "Company") on behalf of stockholders.  A class action complaint has been filed against Upstart.  The complaint alleges that defendants repeatedly stated that Upstart's AI-based models could underwrite loans in a way that was far superior to traditional underwriting processes and lead to the origination of less risky credit.  Upstart touted the predictive capabilities of its AI technology, which would purportedly allow it to handle a recession "far better than a traditional system would."  Defendants also represented that the Company would fund a limited amount of loans from its balance sheet to support the research and development of new loan products, and that it would maintain limited exposure to credit risk.  These and similar statements were false and misleading.  In reality, the Company’s AI-based underwriting model was unable to adequately assess credit risk in changing macroeconomic conditions, such as rising interest rates and inflation.  As a result, Upstart had been increasingly underwriting progressively less creditworthy loans, requiring the Company to fund a significant amount of loans from its balance sheet to support loan transaction volume and stabilize its business, and thereby exposing Upstart to significant credit risk.  As a result of defendants’ misrepresentations, Upstart securities traded at artificially inflated prices.

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Signed pursuant to California Civil Code Section 1633.1, et seq. - and the Uniform Electronic Transactions Act as adopted by the various states and territories of the United States.

Date of signing: 11/21/2022


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