Hercules Capital, Inc. (HTGC) Securities Class Action

Hercules is a business development company that focuses on providing financing solutions (loans) to high-growth venture capital-backed and institutional-backed companies in a variety of technology and life sciences industries.

The lawsuit is focused on the propriety of Hercules’ disclosures about its investment origination and underwriting processes.

In the past, Hercules has assured investors about the robust origination process for sourcing potential investments and the effectiveness of its due diligence process prior to underwriting its investments.

The complaint alleges that Hercules overstated the due diligence with which it conducted its deal sourcing and loan origination process, overstated the due diligence with which it conducted its portfolio valuation process, and reported misclassified portfolio investments. As a result, the lawsuit claims, Hercules overstated or misrepresented its portfolio valuations and its net asset value (“NAV”).

The compny’s assurances were brought into question on February 27, 2026, when Hunterbrook published its findings.

In contrast to Hercules’ assurances, Hunterbrook claimed in part that “according to a former Hercules analyst who worked on deal sourcing” the company’s deal sourcing process essentially amounted to “‘[g]o[ing] on the website for Google Ventures and just see what they invest in and just copy it.’”

Hunterbrook also observed that Hercules is among the most software-exposed BDCs (“[a]bout 35% of the value of the company’s loan portfolio”) and “[d]espite billions worth of such debt across the industry falling into distressed territory […] Hercules still marks its software book at 100 cents on the dollar.”

Further, according to Hunterbrook’s analysis, a growing share of Hercules’ income is “phantom” because of the company’s increasing usage of payment-in-kind (“PIK”) loans to enable its borrowers to pay interest by adding to the principal of their debt rather than paying interest on their debt.

Hunterbrook also spoke with a former member of Hercules’ finance team who reportedly provided information that Hunterbrook said raised flags about the company’s valuation process because, unlike other BDCs, the team was small and overstretched with few checks in place.

This news drove the price of Hercules shares down nearly 8% on February 27, 2026.

FREQUENTLY ASKED QUESTIONS ABOUT THE CASE

What is the HTGC investigation about?

We are investigating Hunterbrook’s allegations and, if true, whether Hercules misled investors about its sourcing, underwriting, marks, PIKs, and, ultimately its NAV.

WHAT SHOULD I DO?

I worked at HTGC. What should I do?

If you were an employee of HTGC, you may have valuable information that could be relevant to the investigation. Hagens Berman is one of the nation’s top whistleblower law firms, and has successfully represented many individuals who come forward with information regarding corporate malfeasance. Under the new SEC Whistleblower program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, contact Reed Kathrein at 844-916-0895 or [email protected].

There are multiple law firms participating, do I need to contact all of them?

No, you do not need to contact all participating law firms. Generally, class-action investigations and lawsuits are consolidated into a single case to streamline the legal process, and attorneys from only a few law firms are selected to serve in a leadership role on the consolidated case. Hagens Berman has a proven track record of being appointed to leadership roles in complex, multidistrict litigation regarding investor fraud and other consumer rights issues, and your claim will be handled by attorneys who have helped secure approximately $325 billion in class-action settlements on behalf of individuals who have suffered due to corporate malfeasance and the wrongdoing of other powerful institutions.

AM I ELIGIBLE?

What is the threshold amount to be eligible? What are “substantial” losses?

The threshold amount and the definition of "substantial" losses may vary depending on a number of factors specific to the case, including the size of the company, market cap, shares outstanding and who holds them and the damages alleged by the fraud. In general, to be eligible to participate in a class-action lawsuit, you must be able to demonstrate that you suffered financial losses as a result of the alleged wrongdoing and that your losses meet the criteria set by the court or law firm. Fill out the form and submit your losses.

CAN I PARTICIPATE?

Am I affected? What do I need to do to participate?

If you were an investor in HTGC, you may be affected and eligible to participate in the case. To determine your eligibility and potential involvement, fill out the form and submit your losses.

Can any HTGC investor participate?

In most class-action investigations and cases, any investor who meets the eligibility criteria, including purchasing the shares during the relevant period, can participate, regardless of the size of their investment. Fill out the form to find out your rights.

I bought on a non-U.S. Exchange. Can I participate?

No. This investigation only covers shares bought on a U.S. exchange, i.e. NASDAQ or NYSE. Fill out the form to find out your rights.

Am I included if I still hold my shares, or do I need to sell to participate?

Participation is based on purchasing shares during the relevant period, rather than your current holdings. Accordingly, you do not need to sell to participate. Fill out the form to find out your rights.