Investor’s Challenge of LoanDepot Settlement Fails on Appeal

An investor objecting to LoanDepot’s $3.5 million settlement failed to convince the Ninth Circuit that a lower court wrongly greenlit the agreement.

The district court gave adequate notice and didn’t abuse its discretion when it granted final approval of a pre-certification class action settlement, the US Court of Appeals for the Ninth Circuit said Monday. Eljon Lako also failed to show that the settlement’s approved allocation plan was unfair.

Lako alleged that LoanDepot misled investors about declines in refinance originations and gain-on-sale margins ahead of a 2021 IPO. He said the company’s offering documents “falsely stated that gain-on-sale margins and ...