UWM Holdings Faces Securities Class Action Over Failed Acquisition
News related to:UWM Holdings Corporation · 2 min read
SAN FRANCISCO, Sept. 7, 2026 /CourierPR/ -- UWM Holdings Corporation faces a securities class action lawsuit after its stock price plummeted by 34% on August 6, 2026. The price drop was triggered by revelations that the company suffered a $603 million hedge loss following its failed attempt to acquire Two Harbors Investment Corp.
The lawsuit centers on UWM's disclosures regarding its hedging strategy in connection with the proposed acquisition. On December 17, 2025, UWM announced a merger agreement with Two Harbors, valued at approximately $1.3 billion in UWM stock. However, Two Harbors terminated its deal with UWM and entered into a cash transaction with CrossCountry Mortgage on March 27, 2026. As a result, UWM faced a significant financial setback.
In its quarterly report released on August 6, 2026, UWM disclosed a massive $451 million net loss, with a $603 million hedging loss as the primary culprit. Management acknowledged for the first time that the company had "over-hedged" and that the Two Harbors transaction had fallen through. UWM also reported a 38% decrease in its total equity, which had sequentially declined by about $615 million.
The market's reaction was swift and severe. The price of UWM shares declined by $3.65, or 75%, between December 17, 2025, and August 6, 2026. In response to these financial setbacks, UWM agreed to a plan to massively dilute existing shareholders, a move that has left investors deeply concerned.
Hagens Berman, a global plaintiffs' rights complex litigation firm, is investigating the alleged claims. Reed Kathrein, the firm's lead partner, stated, "We're focused on UWM's explanations for why it refrained from unwinding its hedges months ago and why management seemingly went virtually silent on the naked hedging risks until recently."
Investors who suffered substantial losses and wish to participate in the lawsuit are encouraged to submit their losses to Hagens Berman. The firm is also offering rewards to whistleblowers under the SEC Whistleblower program. The deadline for investors to submit their claims to become a lead plaintiff is October 13, 2026.
The lawsuit alleges that UWM did not adequately disclose the extent of its hedging risks, which ultimately led to significant financial losses for shareholders. If you invested in UWM and have substantial losses, you are encouraged to contact Hagens Berman to learn more about your rights.
For now, UWM shareholders are left to grapple with the ramifications of the failed acquisition and the subsequent financial turmoil. The outcome of the lawsuit could have significant implications for the company and its investors.