loanDepot Stockholder Derivative Litigation

The purpose of the Notice is to explain the Actions, the terms of the proposed Settlement, and how the proposed Settlement affects current loanDepot stockholders’ legal rights. The Notice is issued pursuant to an Order of the United States District Court for the Central District of California (the “Court”) dated May 2, 2025 (“Preliminary Approval Order”), and further pursuant to the requirements of the Federal Rules of Civil Procedure, including Rule 23.1.

The Court will hold a hearing (the “Settlement Hearing”) on September 26, 2025 at 10:30 a.m., at the United States District Court for the Central District of California, 350 West 1st Street, Courtroom 8A, Los Angeles, CA 90012 to consider whether the Judgment, substantially in the form of Exhibit F to the Stipulation, should be entered:

1. approving the terms of the Settlement as fair, reasonable, adequate, and in the best interests of loanDepot and its stockholders;
2. dismissing with prejudice the Released Claims pursuant to the terms of the Stipulation; and
3. ruling upon Plaintiffs’ Counsel’s request for approval of attorneys’ fees and expenses to be paid to Plaintiffs’ Counsel.

You have a right to participate in the Settlement Hearing.

The Notice describes the rights you may have in the Actions and pursuant to the Stipulation and what steps you may take, but are not required to take, in relation to the Settlement.

Factual Background

The Settlement resolves the claims asserted in the Actions, which alleged breaches of fiduciary duty, among other claims, against certain current and former officers and directors of loanDepot by, among other things, causing the Company to make allegedly false and misleading statements to the public.

The Individual Defendants deny the allegations made by Plaintiffs in each of the Actions.

The Actions

On September 3, 2021, a federal securities class action was filed against loanDepot in the Central District of California, eventually styled as LaFrano et al. v. loanDepot, Inc. et al., Case No. 8:21-cv-01449 (C.D. Cal.) (the “Securities Action”). On May 24, 2024, the Central District of California entered an Order and Final Judgment resolving the Securities Action.

Beginning in late 2021, Plaintiffs filed their respective Actions, alleging, among other things, breaches of fiduciary duty against the Individual Defendants relating to the claims underlying the Securities Action. Several of the Actions were consolidated in their respective courts, and each of the Actions was stayed pending either a final decision on the motion to dismiss or other developments (or completion of) the related Securities Action, and/or pending ongoing settlement discussions among Plaintiffs and Defendants.

In re loanDepot, Inc. Stockholder Derivative Litigation, No. 2:21-cv-08173 (C.D. Cal.). Between October 2021 and April 2022, four shareholder derivative actions were filed in the Central District of California, captioned Aaron Taylor et al. v. Anthony Hsieh et al., No. 2:21-cv-08173-JLS-JDE, Haydon Modglin v. Anthony Hsieh, et al., No. 2:22-cv-00462, Skinner v. Hsieh, et al., No. 2:22-cv-02087, and Johnson v. Hsieh, et al., No. 8:22-cv-00757. All four actions were consolidated into a single action captioned In re loanDepot, Inc. Stockholder Derivative Litigation, No. 2:21-cv-08173.

In re loanDepot, Inc. Derivative Litigation, No. 1:22-cv-00320 (D. Del.). In March 2022, two shareholder derivative actions were filed in the United States District Court for the District of Delaware, captioned Vu v. Anthony Hsieh et al., No. 1:22-cv-00320-CFC, and Porter v. Hsieh, et al., No: 1:22-cv-00388-CFC. On April 5, 2022, those two actions were consolidated into a single action captioned In re loanDepot, Inc. Derivative Litigation, No. 1:22-cv-00320.

In re loanDepot, Inc. Derivative Litigation, No. 2023-0613 (Del. Ch.). In June 2023, two shareholder derivative actions were filed in the Delaware Court of Chancery, captioned Armstrong v. Anthony Hsieh et al., No. 1:22-cv-00320, and Porter v. Hsieh, et al., No: 1:22-cv-00388. On July 25, 2023, the court consolidated those actions into a single action captioned In re loanDepot, Inc. Derivative Litigation, No. 2023-0613.

Settlement Negotiations

Plaintiffs’ Counsel engaged in extensive settlement negotiations with Defendants’ Counsel, over the course of many months. The Parties exchanged many settlement proposals and counterproposals.

The Parties engaged in two mediations through Jed Melnick and Robert Meyer of JAMS ADR, respected and experienced mediators in derivative and other complex litigation. A final resolution of the Actions was reached at the second mediation.

After reaching an agreement in principle, Plaintiffs’ Counsel and Defendants’ Counsel commenced negotiations regarding an appropriate amount of attorneys’ fees and expenses commensurate with the value of the Settlement benefits and the contributions of Plaintiffs’ Counsel to the Settlement. Despite having a number of exchanges through the Mediator, the Parties were unable to agree on an appropriate Fee and Expense Amount. Accordingly, Plaintiffs shall file a motion to approve an appropriate Fee and Expense Amount with the Reviewing Court. Defendants reserve their right to oppose such a motion.

The Parties subsequently reached a definitive agreement to settle the Actions, upon the terms and conditions set forth in the Stipulation, dated February 11, 2025.

On May 2, 2025, the Court entered the Preliminary Approval Order in connection with the Settlement that, among other things, preliminarily approved the Settlement, authorized the Notice to be provided to Current loanDepot Stockholders, and scheduled the Settlement Hearing to consider whether to grant final approval of the Settlement and Plaintiffs’ Counsel’s request for approval of the attorneys’ fees and expenses.

You are a member of the Class if you currently hold loanDepot, Inc. common stock as of May 2, 2025

In consideration of the Settlement and the releases provided therein, and subject to the terms and conditions of the Stipulation, the Parties have agreed to the following settlement consideration for loanDepot.

The Company will implement or maintain certain management and governance measures, including: (i) certain loan approval policies and procedures; (ii) improvements to the oversight of loanDepot’s sales and marketing efforts; (iii) adoption of a Disclosure Committee Charter; (iv) improvements to and public posting of loanDepot’s Internal Allegations Policy; (v) the posting of loanDepot’s “Insider Trading Policy” on the Company’s website; (vi) improvements to the Nominating and Corporate Governance Committee charter; (vii) improvements to the Compensation Committee Charter; (viii) required annual training for Board members on topics relevant to directors of publicly traded companies; (ix) a Chief Risk Officer; (x) a Chief Legal Officer; (xi) the creation of an Enterprise Risk Management Committee; (xii) enhanced Board reporting; (xiii) a Chief Compliance Officer; and (xiv) the publication of loanDepot’s corporate governance policies on the Company’s website.

Such reforms shall be in place within ninety (90) days of the Effective Date of the Settlement and for a period of not less than four (4) years.

Plaintiffs’ Counsel believe that the claims asserted in the Actions have merit and that their investigation of the evidence supports the claims asserted. Without conceding the merit of any of the Defendants’ defenses, and in light of the benefits of the Settlement as well as to avoid the potentially protracted time, expense, and uncertainty associated with continued litigation, including potential trial(s) and appeal(s), Plaintiffs and Plaintiffs’ Counsel have concluded that it is desirable that the Actions be fully and finally settled in the manner and upon the terms and conditions set forth in the Stipulation.

Plaintiffs’ Counsel have also taken into account the uncertain outcome and the risk of any litigation, especially complex litigation such as the Actions, the difficulties and delays inherent in such litigation, the cost to loanDepot, on behalf of which Plaintiffs filed the Actions, that would result from extended litigation. Based on their evaluation, and in light of what Plaintiffs’ Counsel believe to be significant benefits conferred upon loanDepot as a result of the Settlement, Plaintiffs and Plaintiffs’ Counsel have determined the Settlement is in the best interests of loanDepot and its stockholders and have agreed to settle the Actions upon the terms and subject to the conditions set forth in the Stipulation.

While the Individual Defendants remain confident that the courts would ultimately hold Plaintiffs’ claims in all the Actions to be meritless, Defendants recognize the significant risks, expenses, and duration of continued proceedings to defend against the claims made in the Actions through discovery, trial(s), and possible appeal(s). Those expenses, risks, and distractions to the Company are exacerbated and complicated by Plaintiffs’ decisions to file the Actions in multiple forums and jurisdictions across the country. Defendants, therefore, are entering into the Settlement to eliminate the uncertainty, distraction, disruption, burden, risk, and expense of further litigation, and believe that the Settlement is in the best interest of the Company and its stockholders.

The Individual Defendants have each denied and continue to deny that he or she has committed or attempted to commit any violations of law, any breaches of fiduciary duty owed to loanDepot or its stockholders, or any wrongdoing whatsoever, and expressly maintain, that at all relevant times, he or she acted in good faith and in a manner that he or she reasonably believed to be in the best interests of loanDepot and its stockholders. The Individual Defendants further deny that Plaintiffs, loanDepot, or its stockholders suffered any damage or were harmed as a result of any act, omission, or conduct by the Individual Defendants as alleged in the Actions or otherwise. The Individual Defendants further assert, among other things, that the Plaintiffs lack standing to litigate derivatively on behalf of loanDepot because Plaintiffs have not yet pleaded, and cannot properly plead, that a demand on the Board would be futile.

Upon the Effective Date, loanDepot, Plaintiffs (acting on their own behalf and/or derivatively on behalf of loanDepot), and any Person acting derivatively on behalf of loanDepot shall be deemed to have, and by operation of the Judgment shall have, fully, finally, and forever released, relinquished, discharged and dismissed with prejudice the Released Stockholder Claims (including Unknown Claims) against the Released Defendant Persons.

Upon the Effective Date, loanDepot, Plaintiffs (acting on their own behalf and/or derivatively on behalf of loanDepot), and any Person acting derivatively on behalf of loanDepot, shall be forever barred and enjoined from asserting, commencing, instituting, or prosecuting any of the Released Stockholder Claims against any Released Defendant Person.

Upon the Effective Date, each of the Individual Defendants and loanDepot shall be deemed to have, and by operation of the Judgment shall have, fully, finally, and forever released, relinquished, and discharged the Released Defendant Claims (including Unknown Claims) against the Released Stockholder Persons.

Upon the Effective Date, each of the Individual Defendants and loanDepot shall be forever barred and enjoined from asserting, commencing, instituting, or prosecuting any of the Released Defendant Claims (including Unknown Claims) against the Released Stockholder Persons.

Pending final determination of whether the Settlement should be approved, no Plaintiff, directly or derivatively on behalf of loanDepot, or other loanDepot stockholder, derivatively on behalf of loanDepot, may commence or prosecute against any of the Released Persons any action or proceeding in any court, tribunal, or jurisdiction asserting any of the Released Claims.

THE ABOVE DESCRIPTION OF THE PROPOSED TERMS OF SETTLEMENT AND RELEASES IS A SUMMARY. The complete terms, including the definitions of the Effective Date, Released Defendant Claims, Released Defendant Persons, Released Stockholder Claims, Released Stockholder Persons, and Unknown Claims, are set forth in the Stipulation, which is available on the Important Documents page of this website.

After reaching an agreement in principle to settle the Actions, Plaintiffs’ Counsel and Defendants’ counsel commenced good faith negotiations regarding the maximum amount of attorneys’ fees and expenses that Defendants will agree, subject to approval of the Reviewing Court, to pay to Plaintiffs’ Counsel based upon the benefits conferred upon loanDepot and its stockholders through the settlement of the Actions (the “Fee and Expense Amount”). There was no negotiation pertaining to Plaintiffs’ Counsel’s claimed fees or expenses prior to the Parties’ agreement on the corporate governance reforms outlined above, and any potential court order(s) relating to Plaintiffs’ Counsel’s claimed fees or expenses will not affect the binding nature of the substantive terms of the Settlement.

However, Plaintiffs’ Counsel and Defendants’ counsel were unable to reach an agreement on the Fee and Expense Amount. Therefore, Plaintiffs shall file a motion to approve an appropriate Fee and Expense Amount with the Reviewing Court. If the Fee and Expense Amount (or a reduced amount) is approved by the Reviewing Court, Plaintiffs’ Counsel will resolve amongst themselves how to allocate the Fee and Expense Amount amongst Plaintiffs’ Counsel in the various Actions. As part of the agreement, the Plaintiffs and their counsel agree not to seek any fees or expenses related to any of the Actions through any other proceeding.

The Fee and Expense Amount is subject to approval by the Reviewing Court. Any changes by any court to the Fee and Expense Amount will not otherwise affect the Finality of the Settlement.

The Court has scheduled a Settlement Hearing, to be held on September 26, 2025 at 10:30 a.m., before the Honorable Judge Josephine L. Staton at the United States District Court for the Central District of California, 350 West 1st Street, Courtroom 8A, Los Angeles, CA 90012 to consider and determine whether the Judgment should be entered: (i) approving the terms of the Settlement as fair, reasonable, adequate, and in the best interests of loanDepot and its stockholders; (ii) dismissing with prejudice the Released Claims and the Consolidated Action as defined in the Stipulation; and (iii) ruling upon Plaintiffs’ Counsel’s request for approval of the Fee and Expense Amount.

Class Members do not need to attend the Settlement Hearing. The Court will consider any submission made in accordance with the provisions below even if a Class Member does not attend the Settlement Hearing.

Please Note: The date and time of the Settlement Hearing may change without further written notice to Current loanDepot Stockholders. To determine whether the date and time of the Settlement Hearing have changed, it is important that you monitor the Court’s docket before making any plans to attend the Settlement Hearing. Any updates regarding the Settlement Hearing, including any changes to the date or time of the hearing, will be posted to that docket. All papers filed in the Actions and the Court’s docket are available for review via the Public Access to Court Electronic Resources System (“PACER”), available online at http://www.pacer.gov.

Any person who objects to the Settlement, the Judgment to be entered in the litigation, and/or Plaintiffs’ Counsel’s application for attorneys’ fees and expenses, or who otherwise wishes to be heard, may appear in person or by counsel at the Settlement Hearing and request leave of the Court to present evidence or argument that may be proper and relevant; provided, however, that, except by order of the Court for good cause shown, no person shall be heard and no papers, briefs, pleadings or other documents submitted by any person shall be considered by the Court unless not later than twenty-one (21) calendar days prior to the Settlement Hearing such person mails to counsel listed below: (a) a written notice of intention to appear; (b) proof of current ownership of loanDepot stock, as well as documentary evidence of when such stock ownership was acquired; (c) a statement of such person’s objections to any matters before the Court, including the Settlement, the Proposed Judgment, or Plaintiffs’ Counsel’s application for attorneys’ fees and expenses; (d) the grounds for such objections and the reasons that such person desires to appear and be heard, as well as all documents or writings such person desires the Court to consider; and (e) a description of any case, providing the name, court, and docket number, in which the objector or his or her attorney, if any, has objected to a settlement in the last three years.

Plaintiffs’ Counsel:

Thomas J. McKenna
GAINEY MCKENNA & EGLESTON
260 Madison Ave, 22nd Floor
New York, NY 10016

Timothy Brown
THE BROWN LAW FIRM, P.C.
767 Third Avenue, Suite 2501
New York, NY 10017

Benjamin I. Sachs-Michaels
GLANCY PRONGAY & MURRAY LLP
745 Fifth Avenue, 5th Floor
New York, NY 10151

Defendants’ Counsel:

Craig Varnen
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, CA 90071

Unless the Court otherwise directs, no person shall be entitled to object to the approval of the Settlement, any judgment entered thereon, any award of attorneys’ fees and expenses, or otherwise be heard, except by serving and filing a written objection and supporting papers and documents as prescribed above. Any person who fails to object in the manner described above shall be deemed to have waived the right to object (including any right of appeal) and shall be forever barred from raising such objection in this or any other action or proceeding. If the Court approves the Settlement provided for in the stipulation following the Settlement Hearing, Judgment shall be entered substantially in the form attached as Exhibit F to the Stipulation.

This FAQ contains only a summary of the terms of the proposed Settlement. For more detailed information about the matters involved in the Action, you are referred to the papers on file in the Action, including the Stipulation, which can be found on the Important Documents page of this website.

If you have questions regarding the Settlement, you may contact the Settlement Administrator at the address below:

loanDepot Stockholder Derivative Litigation
c/o Epiq Systems, Inc.
PO Box 5356
Portland, OR 97228-5356

Brokerage firms, banks and/or other persons or entities who currently hold shares of common stock of loanDepot are directed promptly to send the Notice to all their respective beneficial owners. If additional copies of the Notice are needed for forwarding to such beneficial owners, they may be obtained by requesting the information from Epiq Class Action & Claims Solutions, Inc. at the below address:

loanDepot Stockholder Derivative Litigation
c/o Epiq Systems, Inc.
PO Box 5356
Portland, OR 97228-5356

To assist the Court and the parties in maintaining accurate lists of Class Members, you are requested to mail notice of any changes in your address to the following address:

loanDepot Stockholder Derivative Litigation
c/o Epiq Systems, Inc.
PO Box 5356
Portland, OR 97228-5356

If the Notice was forwarded to you by the U.S. Postal Service, or if it was otherwise sent to you at an address that is not current, you should immediately contact the Notice Administrator, Epiq Systems, Inc., at the address above or at 1-888-896-5695 (toll-free) and provide them with your correct address. If the Notice Administrator does not have your correct address, you may not receive notice of important developments in the Action.

This website gives only a summary of the lawsuit and the claims asserted by Class Representatives. For more detailed information regarding the Action, you may review the court documents on the Important Documents page of this website or contact Class Counsel.