Plaintiff Vadim Fainberg filed the complaint against Hercules Capital's directors and officers, including CEO Scott Bluestein and CFO Seth Meyer, according to the filing. The suit centers on a February 27, 2026 Hunterbrook Media report about the company's due diligence process.
According to the complaint, a former Hercules analyst told Hunterbrook Media that the deal sourcing process involved going on Google Ventures' website and copying their investments. The report also described a finance team with few checks in place and a valuation team of four people responsible for dozens of companies, the complaint states.
The suit alleges that from May 1, 2025 through February 27, 2026, the defendants made false statements about the company's due diligence protocols for deal sourcing, loan origination, and investment valuation. Hercules Capital, which provides secured senior loans to technology and life sciences companies, had previously stated that prospective portfolio companies were "subject to completion of our due diligence and final investment committee approval process," according to the complaint.
Hercules Capital's stock price fell $1.22 per share, or approximately 7.9%, on the day the Hunterbrook Media report was published, closing at $14.21 on February 27, 2026, the complaint states.
The complaint further alleges that Bluestein and Meyer made insider stock sales totaling approximately $2.7 million during the relevant period before the Hunterbrook Media report was published. Bluestein sold 111,619 shares for more than $2 million in proceeds, according to the filing.
The case is docketed as 5:26-cv-03213.