Wealthfront Stock Plummets After CEO Reveals Personal Stake in Home-Lending Business

Shares of Wealthfront Corporation (NASDAQ: WLTH) tumbled nearly 17% in January after the company's chief executive disclosed a majority ownership stake in a key business subsidiary, triggering a federal securities investigation by plaintiffs' law firm Bleichmar Fonti & Auld LLP. The online investment advisor's stock fell from $12.59 to $10.47 per share following revelations that CEO David Fortunato personally controls 95.1% of Wealthfront's home-lending division.

Background and Context

Wealthfront, an automated financial advisory platform, completed its initial public offering in December 2025, selling more than 34 million shares at $14.00 per share. The company markets itself as a technology-driven investment service using algorithms to provide financial advice and portfolio management. However, its first quarterly earnings report as a public company revealed significant challenges, including net deposit outflows of $208 million—a sharp reversal from the $874 million in inflows during the same period in 2024.

Key Figures and Entities

The investigation centers on statements made by CEO David Fortunato during the company's January 12, 2026 earnings conference call. Fortunato attributed the deposit outflows to falling interest rates while promoting the strategic importance of Wealthfront's home-lending business as a hedge against further rate declines. During the same call, he disclosed his personal 95.1% ownership stake in this subsidiary and suggested the company might "revisit or revise the ownership structure." Investors seeking more information about the investigation can visit the law firm's case page.

Legal and Financial Mechanisms

The securities investigation focuses on whether Wealthfront violated federal securities laws through false or misleading statements in its IPO offering materials and subsequent disclosures. Under U.S. securities regulations, public companies must provide accurate and complete information about material business relationships and conflicts of interest that could affect investment decisions. The timing of Fortunato's ownership disclosure—coming after the IPO but during the first earnings call—raises questions about whether investors had access to all material information when deciding whether to purchase shares.

International Implications and Policy Response

This case highlights ongoing challenges in regulating fintech companies and ensuring transparency around related-party transactions. As automated investment platforms continue to capture market share from traditional wealth managers, regulators face increased pressure to adapt disclosure requirements for business models that blend financial advice with ancillary services like lending. The investigation could precede broader regulatory scrutiny of how robo-advisors structure and disclose business relationships with executives and affiliated companies.

Sources

This report draws on the official investigation announcement by Bleichmar Fonti & Auld LLP, NASDAQ market data for Wealthfront Corporation, and publicly available information about the company's IPO and quarterly earnings disclosures.