Coastal Financial Faces Securities Lawsuit Over Credit Losses
Investors have filed a securities class action against Coastal Financial Corporation, alleging misleading statements about its credit oversight and risk management. The lawsuit covers purchasers of Coastal stock between October 2024 and July 2026.
New York – Coastal Financial Corporation (NASDAQ: CCB) is facing a securities class action lawsuit filed on behalf of investors who purchased the company's common stock between October 28, 2024, and July 29, 2026. The suit alleges that the company made materially false and misleading statements regarding its credit quality and risk management practices.
The complaint claims that Coastal Financial assured investors of "strong regulatory stewardship" and disciplined oversight, while failing to disclose a significant deterioration in a single partner's loan portfolio. This alleged omission came to light when the company announced a $68.8 million credit expense related to that partner, causing its stock price to fall by 43.5% on July 30, 2026, erasing approximately $470 million in market capitalization.
Filed in the U.S. District Court for the Western District of Washington, the lawsuit asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The plaintiffs contend that statements made by the company about its commitment to operating in a "safe and sound manner" and maintaining credit quality were misleading, particularly in light of subsequent disclosures of financial deterioration.
Several public statements made by Coastal Financial between September 2025 and July 2026 are cited in the complaint. These include assurances of strong regulatory oversight and confidence in managing credit quality, even as a substantial partner portfolio allegedly weakened. The lawsuit also points to executive departures, including the Chief Risk Officer and CFO, as potentially indicating awareness of the underlying issues.
Investors have until December 1, 2026, to seek appointment as lead plaintiff in the case. The suit argues that forward-looking statements made by the company lacked adequate cautionary language, meaning Coastal Financial cannot rely on safe harbor provisions to shield itself from liability. The law firm Levi & Korsinsky, LLP is representing the investors.