LoanDepot Misled Investors Ahead of Public Offering, Suit Says

LoanDepot Inc. misled investors about substantial declines in refinance originations and gain-on-sale margins ahead of its February IPO, a complaint filed in federal court in California alleges.

The disclosures in the offering documents filed ahead of the mortgage lender’s initial public offering were “boilerplate” and “actually misled investors rather than warning them about known, existing facts,” according to the complaint filed in the U.S. District Court for the Central District of California.

The offering documents “falsely stated that gain-on-sale margins and revenues could be impacted ‘in future years,’” when LoanDepot was actually “already experiencing lower gain-on-sale margins,” the Sept. 3 ...