UWM Holdings Faces Securities Class Action Over Hedge Losses
News related to:UWM Holdings Corporation · 1 min read
SAN FRANCISCO, Sept. 15, 2026 /CourierPR/ -- UWM Holdings Corporation, a publicly traded company listed on the New York Stock Exchange under the ticker symbol UWMC, faces a securities class action lawsuit following a significant drop in its share price. The lawsuit centers on alleged misrepresentations regarding the company's hedging strategy in connection with its failed attempt to acquire Two Harbors Investment Corp.
On December 17, 2025, UWM Holdings announced a merger agreement with Two Harbors, a mortgage servicing rights company, for approximately $1.3 billion in UWM stock. However, on March 27, 2026, Two Harbors terminated its deal with UWM and entered into a definitive merger agreement with CrossCountry Mortgage in a cash transaction. This left UWM with a massive hedge that had not been unwound, leading to significant financial losses.
On August 6, 2026, UWM reported a $451 million net loss and a $603 million hedging loss, revealing that the company had been over-hedged. The company also disclosed that its total equity had plummeted by approximately $615 million, or 38%, due to the failed acquisition. The market reacted swiftly, causing UWM's share price to drop by 34% that day.
The lawsuit, being investigated by Hagens Berman, alleges that UWM did not disclose the full extent of its exposure to the hedge risks. According to Reed Kathrein, a partner at Hagens Berman, the firm is focusing on UWM's explanations for why it did not unwind its hedges and why management remained silent on the risks until recently.
The complaint centers on UWM's failure to adequately disclose its hedging strategy and the risks associated with the failed acquisition.
Investors who believe they have substantial losses due to the company's actions are encouraged to contact Hagens Berman. The firm is also offering a reward to whistleblowers who provide non-public information that can assist in the investigation. Under the SEC Whistleblower program, individuals who provide original information can receive up to 30% of any successful recovery made by the SEC.