January 25, 2021 - The court granted the defendants' motion to dismiss.

November 20, 2020 - A motion to dismiss the amended complaint was filed.

November 6, 2020 - An amended complaint was filed.

July 29, 2020 - An investor in shares of Velocity Financial, Inc. (NYSE: VEL) filed a lawsuit in the U.S. District Court for the Central District of California over alleged violations of Federal Securities Laws by Velocity Financial, Inc. in connection with certain allegedly false and misleading statements made in connection with Velocity’s January 2020 initial public offering (“IPO”).

Westlake Village, CA based Velocity Financial, Inc. operates as a real estate finance company in the United States. On or about January 22, 2020, Velocity Financial, Inc. sold 7,250,000 shares of stock in its initial public stock offering (the IPO ), at $13.00 a share raising $94,250,000 in new capital. However, since the IPO, Velocity stock has declined to as low as $2.24 per share on April 3, 2020.

On April 8, 2020, Velocity announced its financial and operational results for the 2019 fourth quarter and full year. The Company stated it had suspended all loan origination operations due to market volatility and that it was experiencing enhanced delinquencies in its loan portfolio and had implemented various strategies to attempt to “‘address this challenge.’”

On May 13, 2020, Velocity announced its financial and operational results for the first quarter of 2020 – the same quarter in which the IPO was conducted. The Company stated that its net income had decreased 50% sequentially during the quarter to just $2.6 million. By May 15, 2020, Velocity Financial, Inc. (NYSE: VEL) stock was trading at just $2.53 per share – more than 80% below the price investors paid for the stock in the IPO just four months previously.

According to the complaint the plaintiff alleges on behalf of purchasers of Velocity Financial, Inc. (NYSE: VEL) common shares who purchased NYSE: VEL shares pursuant and/or traceable to the Registration Statement and Prospectus (the “Offering Materials”) issued in connection with Velocity’s January 2020 IPO, that the defendants violated Federal Securities Laws.

More specifically, the plaintiff claims that the 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, that the 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, and that 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.