The digital wealth management platform Wealthfront Corp. has faced two significant information disclosure shocks in quick succession, prompting multiple law firms to initiate securities fraud investigations.
On January 12, 2026, Wealthfront released its fiscal third-quarter results, disclosing net deposit outflows of $208 million, a stark contrast to the $874 million in net inflows during the same period the previous year. In a subsequent earnings call, CEO David Fortunato attributed the deposit slowdown to declining interest rates and emphasized that the newly launched home loan business was critical for addressing this trend. Fortunato also revealed his personal 95.1% ownership stake in the Wealthfront home loan venture, stating the company might "revisit or modify the ownership structure." This news caused the company's stock to fall by $2.12, or 16.8%, the next day, closing at $10.47.
On June 4, 2026, the company released its fiscal first-quarter report, further revealing that total net deposits had plunged 69% year-over-year to $554 million. Gross margin also declined compared to the prior year, partly attributed to "start-up costs associated with the Wealthfront home loan." This announcement led to another stock price drop of $1.65, or 14.35%, closing at $9.85. The stock has since fallen further to approximately $8.62.
As of June 9, several law firms, including The Law Offices of Howard G. Smith, The Frank R. Cruz Firm, The Rosen Law Firm, Pomerantz LLP, and The Schall Law Firm, have announced investigations on behalf of investors. The core focus of these investigations is whether the company made false or misleading statements regarding deposit trends, the impact of the home loan business on its financial performance, and potential conflicts of interest related to the CEO's personal stake.
Several investment banks, including Keefe, Bruyette & Woods, JPMorgan, and RBC Capital Markets, have lowered their price targets for the stock, which now trades well below its 52-week high of $14.88. It is worth noting that the company's total platform assets still reached a record high of $96.6 billion, representing a 19% year-over-year increase.