Wealthfront faces securities probe as WLTH stock drops below $10

Johnson Fistel is investigating Wealthfront for potential securities law violations after the fintech firm's stock fell more than 30% from its IPO price.

"We are investigating whether Wealthfront complied with federal securities laws," Jim Baker, investor relations at Johnson Fistel, said.

Wealthfront went public at $14 a share in December 2025, offering 34.6 million shares on the Nasdaq. The stock now trades at $9.47, giving the Palo Alto-based company a market value of $1.41 billion. The probe follows a series of disclosures that showed slowing deposit growth and a shift in client assets toward lower-fee products.

In January, Wealthfront reported third-quarter total net deposits of $1.6 billion, down from $4.4 billion a year earlier, sending the stock down 17 percent in a single day. By the fiscal fourth quarter, net deposits had turned negative at negative $360 million. In June, the company reported first-quarter revenue of $90.5 million, up 7 percent year over year, while total platform assets reached $99.1 billion — a record. But revenue growth lagged asset growth as clients moved money from higher-fee Cash Management accounts into Investment Advisory accounts, which carry lower fees. Cash Management assets fell 0.5 percent month over month in June to $44.8 billion, while Investment Advisory assets rose 0.7 percent to $54.3 billion.

The investigation could lead to lawsuits and regulatory penalties, adding pressure on a stock already trading below its IPO price. Wealthfront's next quarterly report will be closely watched for any update on the matter.

This article is for informational purposes only and does not constitute investment advice.