Wealthfront faces fraud probe as 3 law firms investigate IPO disclosures

Wolf Haldenstein Adler Freeman & Herz LLP launched a securities fraud investigation into Wealthfront Corp. on July 1, joining at least two other law firms probing whether the digital wealth manager and its officers misled investors.

"The investigation concerns whether Wealthfront and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices," the firm said in a statement.

Wealthfront went public on Dec. 12, 2025, pricing 43.6 million shares at $14.00 each. The stock has since lost about 30% of its value. Shares fell 16.84% on Jan. 13 after the company reported third-quarter results that showed decreased asset outflows, with management citing interest-rate cuts as a factor in client capital reallocation. The stock dropped another 14.35% on June 5 after first-quarter 2026 results revealed net deposits had fallen 69% year over year to $554 million, with gross profit margin squeezed partly by "startup expenses associated with Wealthfront Home Lending."

The Schall Law Firm and Pomerantz LLP have also opened investigations into Wealthfront, according to separate statements. Pomerantz's probe focuses on whether the company made false or misleading statements related to its IPO and subsequent earnings reports. The investigations center on whether Wealthfront's disclosures adequately warned investors about headwinds from interest-rate sensitivity and the costs of its home lending expansion.

The probes put additional pressure on Wealthfront's management as the company navigates a post-IPO environment marked by slowing deposit growth and margin compression. Wealthfront's next quarterly report, expected in August, will be closely watched for any further deterioration in net deposits and for management's commentary on the legal investigations.

This article is for informational purposes only and does not constitute investment advice.