Robbins Geller Rudman & Dowd LLP Files Class Action Suit Against Velocity Financial, Inc.

Robbins Geller Rudman & Dowd LLP (https://www.rgrdlaw.com/cases-velocity-financial-inc-class-action-laws ...) today announced that it filed a class action seeking to represent purchasers of Velocity Financial, Inc. f/k/a Velocity Financial, LLC (NYSE:VEL) common stock pursuant and/or traceable to the Registration Statement and Prospectus (the “Offering Materials”) issued in connection with Velocity’s January 2020 initial public offering (“IPO”). This action was filed in the Central District of California and is captioned Berg v. Velocity Financial, Inc., No. 20-cv-06780.

The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Velocity common stock pursuant and/or traceable to the Offering Materials to seek appointment as lead plaintiff in the Velocity Financial class action lawsuit. A lead plaintiff acts on behalf of all other class members in directing the Velocity Financial class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Velocity Financial class action lawsuit. An investor’s ability to share in any potential future recovery of the Velocity Financial class action lawsuit is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff in the Velocity Financial class action lawsuit, you must move the Court no later than 60 days from today. If you wish to discuss the Velocity Financial class action lawsuit or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Brian E. Cochran of Robbins Geller, at 800/449-4900 or 619/231-1058 or via e-mail at [e-mail]. You can view a copy of the complaint as filed at https://www.rgrdlaw.com/cases-velocity-financial-inc-class-action-laws ....

The Velocity Financial class action lawsuit charges Velocity, certain of its officers and directors, its equity sponsor and controlling shareholder, and the underwriters of the IPO with violations of the Securities Act of 1933. Velocity is a real estate finance company that originates and manages loans issued to borrowers nationwide to finance the purchase of small residential rental and commercial real estate investment properties.

The complaint alleges that defendants failed to disclose that, at the time of the IPO, the Company’s non-performing loans had dramatically increased in size from the figures provided in the Offering Materials, as measured by both the amount of unpaid principal balance and as a percentage of the Company’s overall loan portfolio. In addition, defendants failed to provide any information to investors regarding the potential impact of the novel coronavirus on Velocity’s business and operations, despite the fact that the international spread of the virus had already been confirmed at the time of the IPO. The failure to disclose the substantial and growing proportion of the Company’s loans that were non-performing and/or on non-accrual status as of the IPO rendered the statements contained in the Offering Materials regarding the quality of the Company’s loan portfolio and underwriting practices materially misleading.