Today, Grant & Eisenhofer P.A. filed a class action lawsuit on behalf of Allegheny County Employees’ Retirement System against Coastal Financial Corporation (“Coastal” or the “Company”) and three of the Company’s current and former senior executives, including CEO Eric M. Sprink, CFO Joel Edwards, and former CFO Brandon Soto (collectively, the “Defendants”). The action alleges that Defendants defrauded investors by making materially false and/or misleading statements and by failing to disclose materially adverse facts concerning the growth and credit quality of Coastal’s CCBX business, the adequacy of the Company’s risk management and credit monitoring practices, and the credit protections afforded by Coastal’s CCBX partner indemnification agreements.
The action is brought on behalf of all investors who purchased or acquired Coastal common stock between October 28, 2024 and July 29, 2026, inclusive (the “Class Period”). The action, brought in the United States District Court for the Western District of Washington, is captioned Allegheny County Employees’ Retirement System v. Coastal Financial Corporation, et al., No. 2:26-cv-03746 (W.D. Wash.).
Coastal is a bank holding company that provides traditional banking products and services through its wholly owned subsidiary, Coastal Community Bank. Coastal also operates CCBX, a banking-as-a-service (“BaaS”) platform through which it partners with digital financial service providers, companies, and brands to offer banking and other financial services to their customers.
The complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. Specifically, the lawsuit alleges that throughout the Class Period, Defendants misrepresented and failed to disclose key facts concerning the credit risks associated with Coastal’s CCBX business, including the extent of the Company’s exposure to credit losses and the effectiveness and value of its contractual indemnification protections. Defendants issued a series of materially false and misleading statements that led investors to believe that Coastal was adequately protected against credit losses associated with its CCBX partner relationships.
Investors learned the truth on July 30, 2026, when Coastal announced a GAAP net loss of $42.1 million for the second quarter of 2026, driven primarily by a $68.8 million credit expense related to a single CCBX partner relationship. Defendants revealed that the charge included a $46 million valuation adjustment to a credit enhancement asset and a $22.8 million provision for credit losses associated with the partner’s indemnification agreement, and that the affected portfolio consisted of approximately $500 million in underlying loans and related reimbursement exposure. On this news, Coastal’s stock price fell $30.75 per share, or 43.5%, to close at $39.91 per share on July 30, 2026, erasing approximately $470 million in market capitalization.
Investors who purchased or acquired Coastal’s common stock during the Class Period are members of this proposed Class and may be able to seek appointment as lead plaintiff, which is a court-appointed representative of the Class, by complying with the relevant provisions of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”). See 15 U.S.C. Section 78u-4(a)(3).
If you wish to serve as lead plaintiff, you must move the Court by no later than December 1, 2026. You do not need to seek to become a lead plaintiff in order to share in any possible recovery. You may also retain counsel of your choice to represent you in this action.
If you wish to discuss this action or have any questions concerning this notice or your rights, please contact Vincent J. Pontrello at Grant & Eisenhofer.
View source version on businesswire.com: https://www.businesswire.com/news/home/20261002951606/en/
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