Upstart Board, Third Point Accused of Billions in Insider Sales

An Upstart Holdings Inc. investor sued its senior leaders and a major financial backer, claiming they made $2.7 billion in insider stock sales while misleading the public about the company’s financial health and the artificial intelligence engine powering its lending platform.

The shareholder derivative lawsuit in Delaware’s Chancery Court targets current and former members of Upstart’s board and management, along with affiliates of Third Point LLC, a Silicon Valley hedge fund sponsor that invested early and “was heavily involved in overseeing the company’s operations.”

The suit accuses them of pumping up Upstart’s stock with lies about its “nimble” AI system ...