Overview

A class action lawsuit has been filed against Cross River Bank (“CRB” or the “Company”) (Other: SUNLQ) alleging violations of the federal securities laws.  The CRB class action lawsuit is brought on behalf of all persons and entities who purchased or otherwise acquired securities of Sunlight and/or Spartan (collectively, “Sunlight”) between January 25, 2021, and October 31, 2023, both dates inclusive (the “Class Period”).  Investors have until December 02, 2024, to seek appointment as lead plaintiff in the CRB class action lawsuit.

Cross River Bank was established in 2008 per the Federal Deposit Insurance Corporation (FDIC) and is a subsidiary of CRB Group, Inc.  CRB has been disclosed to be Sunlight Financial Holdings, Inc. (“Sunlight”) f/k/a Spartan Acquisition Corp. II (“Spartan”) or the purported “Bank Partner,” as that term is used in Sunlight’s U.S. Securities and Exchange Commission filings.

Relevant non-party Sunlight was a technology-enabled point-of-sale financing platform that provides residential solar and home improvement contractors the ability to offer point-of-sale financing to those contractors’ customers when purchasing residential solar systems or other home improvements.  The resulting loans were funded by Sunlight’s capital providers and facilitated by Sunlight’s proprietary technology platform, Orange through which Sunlight offered instant credit decisions to homeowners nationwide at point-of-sale on behalf of Sunlight’s capital providers.

The CRB class action lawsuit alleges that during the Class Period, Sunlight categorized its capital providers into “direct” and “indirect” channels.  In the direct channel, depositary institutions like banks and credit unions funded solar and home improvement loans directly onto their balance sheets.  In the indirect channel, loans were pooled and sold to capital providers that did not originate loans, with Sunlight’s Bank Partner, CRB, playing a key role.  However, CRB engaged in a fraudulent scheme with Sunlight by extending loans to risky solar contractors and accumulating large loan pools on CRB’s balance sheet, which Sunlight retained liability for.  Neither Sunlight nor CRB disclosed the magnitude of this risk to investors.  As interest rates rose, Sunlight kept its loan interest rates artificially low, making the loans unsellable, and turned to CRB to finance the growing “Backbook” of mispriced loans.

CRB repeatedly allowed Sunlight to exceed credit limits, concealing the Company’s deteriorating financial health from investors.  Sunlight’s public filings omitted key information about the Backbook until September 2022, when Sunlight announced a $30-$33 million impairment, causing its stock to drop by 57%.  Further disclosures followed in 2023, revealing significant financial exposure and unsustainable loan practices.  Despite amendments to agreements and efforts to secure financing, Sunlight’s financial picture worsened, with its shares plummeting and the Company eventually filing for Chapter 11 bankruptcy in October 2023.  CRB’s fraudulent scheme enabled Sunlight to deceive investors about its true financial condition, artificially inflating stock prices and causing significant losses for shareholders.  Ultimately, Sunlight’s stockholders were left with worthless investments as a result of CRB’s actions to benefit from substantial loan fees and conceal Sunlight’s financial exposure.

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If you purchased or otherwise acquired securities of Sunlight and/or Spartan between January 25, 2021, and October 31, 2023, both dates inclusive, and you wish to serve as lead plaintiff in this lawsuit, we encourage you to submit your information to DiCello Levitt LLP via the form on this page. 

You can also contact DiCello Levitt partner Brian O’Mara by calling (888) 287-9005 or at [email protected]. 

The deadline to apply to the Court to serve as a lead plaintiff in the CRB class action lawsuit is December 02, 2024.