Hercules Capital, Inc. Class Action Lawsuit – HTGC

Introduction to Hercules Capital, Inc. (HTGC) Securities Class Action Lawsuit

A securities fraud class action has been filed against Hercules Capital, Inc. (NYSE: HTGC), a Business Development Company (BDC), and certain executives on behalf of investors who purchased securities between May 1, 2025 and February 27, 2026 under the federal securities laws, including Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. Investors allege the company and its leadership misrepresented the rigor of its due diligence processes, loan origination procedures, and portfolio valuation methods while touting disciplined underwriting as a hallmark of the business. According to the complaint, the company's deal sourcing essentially amounted to copying Google Ventures' investments, its valuation team was understaffed with inadequate oversight, and it misclassified portfolio investments to obscure software debt exposure. When these practices were revealed through an investigative report, Hercules Capital's stock price fell sharply, causing significant losses to investors.

Hercules Capital, Inc. (HTGC) Securities Lawsuit Case Details

Case Name: Hunter Hanlon Taylor v. Hercules Capital, Inc., et al.

Case No.: 3:26-cv-02465-VC

Jurisdiction: U.S. District Court, Northern District of California

Filed on: March 20, 2026

Hercules Capital, Inc. (HTGC) Company Profile

Hercules Capital is a private credit firm, headquartered in San Mateo, California, also known as a Business Development Company, which specializes in making private loans to companies through loan origination and underwriting to venture-backed portfolio investments and describes itself as the largest non-bank source of venture financing in the market. The company manages more than $5.7 billion of assets with a concentrated focus on portfolio investments across life sciences and technology in the private credit sector and focuses on life sciences investments, venture-backed technology investments, and private equity/sponsor-backed technology investments.

Hercules Capital, Inc. (HTGC) Securities Lawsuit Class Period

May 1, 2025 – February 27, 2026, inclusive.

All persons and entities that purchased or otherwise acquired Hercules Capital securities during the Class Period and were damaged thereby may be eligible to join the Hercules Capital, Inc. (HTGC) class action lawsuit.

Allegations in the Hercules Capital, Inc. (HTGC) Securities Class Action Lawsuit

The complaint targets Hercules Capital, Inc., Chief Executive Officer Scott Bluestein, and Chief Financial Officer Seth H. Meyer for allegedly misleading investors about the company's underwriting standards and portfolio management practices in violation of federal securities laws. Throughout the class period, the company filed quarterly reports on May 1, 2025, July 31, 2025, and October 30, 2025 stating that prospective portfolio companies were subject to completion of due diligence and final investment committee approval processes. On February 12, 2026, CEO Bluestein issued a press release emphasizing that the company was maintaining disciplined underwriting as its hallmark and remained committed to fundamental principles of disciplined credit and underwriting. That same day, the company filed its Form 10-K stating that the origination process for investments included sourcing, screening, preliminary due diligence, and deal structuring and negotiation. According to the complaint, these representations painted a picture of robust oversight and careful analysis, but the reality was starkly different because deal sourcing managers relied on other investors' due diligence by copying the Google Ventures investment list. Investors allege the company overstated the due diligence applied to its deal sourcing and loan origination, as well as to its portfolio valuation process despite a valuations team that lacked cross-team review and adequate checks, and reported misclassified portfolio investments that underrepresented its software debt exposure, which the complaint says comprised approximately 35% (about $1.5 billion) of the loan portfolio and was marked at or around part. As a result, the complaint alleges the company overstated and misrepresented its portfolio valuations, rendering defendants' positive statements about the company's business, operations, and prospects materially misleading and lacking a reasonable basis.

The Truth Emerges

On February 27, 2026, Hunterbrook Media published an investigative report entitled "The Myth of Hercules Capital" based on interviews with former employees that contradicted the company's public representations and scrutinized Hercules Capital's private credit practices. According to a former Hercules analyst who worked on deal sourcing, the company's process essentially amounted to going on the website for Google Ventures and just seeing what they invest in and copying it rather than conducting independent due diligence. A former member of Hercules' finance team described the valuations team as consisting of just four people in a single reporting line responsible for dozens of companies with few checks or cross-team review, highlighting inadequate internal controls in the valuation process. The report also revealed that the company underrepresented its significant software debt exposure by assigning certain businesses that described themselves as software companies to categories outside of software, even as industry software debt was in distressed territory and while the company marked software loans at par, or about 100 cents on the dollar. These revelations directly contradicted the company's repeated assurances about disciplined underwriting, robust due diligence processes, and comprehensive sourcing methodologies that had been presented to investors throughout the class period and called into question the integrity of portfolio valuation.

Market Reaction

On February 27, 2026, following publication of the Hunterbrook Media report, Hercules Capital's stock price fell $1.22, or 7.9%, to close at $14.21 per share on unusually heavy trading volume for HTGC, reflecting a single-day decline tied to the disclosure.

Next Steps

● The Court will issue its order for lead plaintiff and counsel in the weeks after submissions are due.

● The Court will then consider motion for class certification.

● The Court will later consider a Motion to Dismiss.

Disclaimer: This shareholder alert is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for personalized guidance. No specific outcomes are guaranteed.

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Certification of Plaintiff Pursuant to Federal Securities Laws

I, duly certify and say, as to the claims asserted under the federal securities laws, that:

I have reviewed a complaint filed in the action.
I did not purchase the security that is the subject of this action at the direction of plaintiff's counsel or in order to participate in this action.
I am willing to serve as a representative party on behalf of the class, including providing testimony at deposition and trial, if necessary.
My transaction(s) in Hercules Capital, Inc. which are the subject of this litigation during the class period set forth in the complaint are set forth in the chart attached hereto.
Within the last 3 years,
I have not sought to serve nor have I served as a class representative in any federal securities fraud case. I have sought to serve as a class representative in
I will not accept any payment for serving as a representative party on behalf of the class beyond the Plaintiff's pro rata share of any recovery, except as ordered or approved by the court, including any award for reasonable costs and expenses (including lost wages) directly relating to the representation of the class.

Are you US Citizen?

Yes. I certify under penalty of perjury that the foregoing is true and correct. Executed this No. I certify under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed this

Clear

Signed pursuant to California Civil Code Section 1633.1, et seq. - and the Uniform Electronic Transactions Act as adopted by the various states and territories of the United States.

By your signature above, you confirm that have retained Levi & Korsinsky, LLP to represent you and the shareholder class as a lead plaintiff in the pending class action against Hercules Capital, Inc. This representation will be on a contingency basis, meaning that Levi & Korsinsky will advance all expenses in the litigation and will only seek compensation and/or reimbursement of expenses if the firm obtains a recovery. Regardless of the result, we will never ask you to directly pay for any attorneys’ fees, expenses, or costs. Should we obtain a favorable result, we may ask the court to award us compensation and reimbursement of expenses to be paid by the defendants or as a portion of any class recovery. In exchange for our representation, you agree to cooperate as our client by providing, for example, relevant documents and deposition testimony, if necessary. During the course of this litigation, we may employ and/or work with other law firms, experts, and third-parties to successfully prosecute this action. If you are not appointed as the lead plaintiff or Levi & Korsinsky is not appointed as lead counsel, we will notify you of such decision at which time this representation will end unless otherwise extended by you and the firm. We look forward to working with you towards a successful resolution of this action.

I have reviewed the complaint linked in paragraph 1