Executive Accountability: Paul Gu Named in Securities Action

NEW YORK, April 22, 2026 /PRNewswire/ -- Levi & Korsinsky, LLP notifies investors that Paul Gu, Co-founder and Chief Technology Officer of Upstart Holdings, Inc. (NASDAQ: UPST), is named as a defendant in a securities class action covering purchases between May 14, 2025 and November 4, 2025. Find out if you can recover losses tied to executive misconduct. You may also contact Joseph E. Levi, Esq. at jlevi@levikorsinsky.com or (212) 363-7500.

Upstart shareholders lost $4.49 per share, a 9.71% decline, after the Company revealed that its flagship AI underwriting system suffered from a tendency to overreact to negative macroeconomic signals, which executives allegedly knew about but did not disclose.

Paul Gu's Role During the Class Period

The complaint highlighted Gu as a source of pertinent disclosures regarding Model 22, Upstart's AI underwriting engine launched in early May 2025. As CTO and Co-founder, Gu admitted knowledge of decisions regarding the model's calibration and its tendency to "be a little overresponsive." He is also a member of the Board of Directors and has been designated as Upstart's next CEO effective May 1, 2026.

During the Class Period, the action claims Gu sold 5,000 shares of Upstart stock, generating proceeds exceeding $344,000.

What Paul Gu Allegedly Oversaw

The securities action contends that Gu had direct responsibility over the AI system that was later revealed to be "overly responsive" to macroeconomic signals and plagued by "sampling and measurement error." Specifically, the complaint identifies the following:

• On August 5, 2025, Gu described Model 22's neural network architecture as finding "many, many small subtle relationships in the data" that drove higher approval rates
• On November 4, 2025, Gu admitted the model "can be a little overly responsive to the latest changes" and that "there's always some kind of sampling and measurement error"
• Gu acknowledged that executives were "knowingly making a choice with our model to be a little bit more conservative on the credit side in earlier parts of the quarter"
• Gu conceded measurement error had to be reduced "by about half" to prevent future conversion rate volatility

Paul Gu's Certifications and Liability

As the officer with direct technical oversight of Upstart's core AI product, Gu is alleged to have possessed detailed knowledge of Model 22's behavior, limitations, and impact on financial results. The complaint asserts that Gu's public statements touting the model's accuracy were materially misleading given what he later admitted about its overresponsiveness and inherent measurement errors.

"Individual officers who sign SEC certifications bear personal responsibility for the accuracy of corporate disclosures. When the executive most responsible for a company's core technology publicly touts its capabilities while allegedly aware of fundamental calibration issues, investors deserve accountability," stated Joseph E. Levi, Esq.

Section 20(a) Context for Paul Gu

The complaint brings claims under Section 20(a) of the Securities Exchange Act of 1934, which imposes liability on individuals who act as "controlling persons" of a company that violates federal securities laws. As CTO, Co-founder, and Board member with direct authority over the AI models central to every aspect of Upstart's business, the action contends Gu had the power and authority to control the content of the Company's public statements regarding Model 22's performance.

LEAD PLAINTIFF DEADLINE: June 8, 2026

Speak with an attorney about executive liability claims in the Upstart action or call Joseph E. Levi, Esq. at (212) 363-7500.

Levi & Korsinsky, LLP, Top 50 securities litigation firm (ISS, seven consecutive years). Over 70 professionals. Hundreds of millions recovered for investors.

Frequently Asked Questions About the UPST Lawsuit

Q: Who are the defendants named in the UPST lawsuit?A: The complaint names Upstart Holdings, Inc. and individual defendants including CEO Dave Girouard, CFO Sanjay Datta, CTO Paul Gu, and CMO Chantal Rapport, who signed SEC filings, made public statements, or certified financial disclosures under Sarbanes-Oxley.

Q: What specific misstatements does the UPST lawsuit allege?A: The complaint alleges Upstart made materially false or misleading statements regarding the accuracy and performance of its AI underwriting model, Model 22, and its positive impact on loan approval rates, conversion rates, and revenue growth. When the model's overresponsiveness was revealed on November 4, 2025, the stock price declined sharply.

Q: What do UPST investors need to do right now?A: Gather brokerage records including purchase dates, share quantities, and prices paid. Contact Levi & Korsinsky for a free, no-obligation evaluation at jlevi@levikorsinsky.com or (212) 363-7500. No immediate action is required to remain eligible as a class member.

Q: What if I already sold my UPST shares -- can I still recover losses?A: Yes. Eligibility is based on when you purchased, not whether you still hold them. Investors who bought during the class period and sold at a loss may still participate.

Q: Do I need to go to court or give testimony?A: No. The overwhelming majority of class members never appear in court or give depositions. You submit a claim form to receive your portion of recovery.

Q: What does it cost me to participate?A: Nothing. Securities class actions are handled on a pure contingency basis. No upfront fees, no retainer, no out-of-pocket costs.

Q: Can I join a different law firm's lawsuit instead?A: Multiple firms often file competing complaints. The court consolidates and appoints a single lead counsel. Contacting Levi & Korsinsky before June 8, 2026 ensures your losses are considered.

CONTACT:

Levi & Korsinsky, LLP

Joseph E. Levi, Esq.

Ed Korsinsky, Esq.

33 Whitehall Street, 27th Floor

New York, NY 10004

jlevi@levikorsinsky.com

Tel: (212) 363-7500

Fax: (212) 363-7171

View original content to download multimedia:https://www.prnewswire.com/news-releases/upst-investor-alert-upstart-holdings-securities-fraud-lawsuit---investors-with-losses-may-seek-to-lead-the-class-action-after-cto-allegedly-oversaw-flawed-model-levi--korsinsky-302749885.html

SOURCE Levi & Korsinsky, LLP