A UWM Holdings Corp. shareholder filed a proposed class-action lawsuit alleging the wholesale mortgage lender misled investors about its hedging strategy tied to a failed bid for Two Harbors Investment Corp., in violation of the Securities Exchange Act of 1934.

The complaint, filed last week in the U.S. District Court for the Eastern District of Michigan, claims UWM deviated from its traditional hedge strategy and “over-hedged” in anticipation of acquiring TWO. That alleged shift created “excess hedging risk” that contradicted the company’s public statements about its business, operations and prospects, according to the filing.

“As a result of Defendants’ details ⇒

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