Veritone, Inc. (VERI) Securities Class Action Lawsuit Update

Company: Veritone, Inc. (NASDAQ: VERI)

Lead Plaintiff Deadline: July 20, 2026

Class Period: October 14, 2025 - April 14, 2026

Stock Drop: March 27, 2026 - VERI fell $0.77 (29.5%) to $1.84; April 1, 2026 - VERI fell $0.18 (9.14%) to $1.79; April 15, 2026 - VERI fell $0.19 (8.3%) to $2.09

Lawsuit Type: Securities Class Action

Introduction

On May 21, 2026, a securities class action complaint was filed in the United States District Court for the Central District of California against Veritone, Inc. (NASDAQ: VERI), its Chief Executive Officer Ryan Steelberg, and its Chief Financial Officer Michael L. Zemetra. The lawsuit was brought on behalf of investors who purchased or otherwise acquired Veritone securities between October 14, 2025 and April 14, 2026, inclusive, alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.

The complaint centers on the allegation that Veritone executives touted revenue growth and major contract wins while the company allegedly had accounting errors and misclassified revenue. In the third quarter of 2025, Veritone reported revenue of $29.1 million, a 32.4% year-over-year increase. CEO Steelberg declared the company was "executing at a high level" and "on track to reach profitability by the latter part of 2026." The complaint alleges that as a result of these statements, Veritone's securities traded at artificially inflated prices during the Class Period. On October 15, 2025, VERI shares reached a Class Period high of $8.39. Beneath the surface, however, the complaint alleges the company had inaccurately recorded and misclassified certain revenue and costs, overstated its revenue, assets, and accounts receivable, and maintained deficient internal controls over accounting and financial reporting.

According to the complaint, the alleged issues emerged in stages. On March 26, 2026, Veritone disclosed it was still "finalizing its accounting determination of certain revenue transactions under ASC 606," revealing a non-monetary software transaction with a negotiated price of $13.0 million that may have been worth as little as $0.4 million. VERI shares plunged 29.5% in a single session. Days later, the company disclosed it could not file its annual report on time and that previously reported Q3 2025 revenue might need to be reduced by $1.5 million to $2.5 million. The stock fell another 9.14%. The final disclosure identified in the complaint came on April 14, 2026, when Veritone disclosed that its Q3 2025 financial statements "should no longer be relied upon" due to multiple errors, including a $2.2 million revenue overstatement and misclassification of revenue in transactions where the company acted as an agent. Shares dropped another 8.3%. From its Class Period high of $8.39, VERI had lost more than 75% of its value.

Backdrop and Business Context

Veritone, Inc. describes itself as an enterprise AI company. The complaint identifies Veritone as a Delaware corporation with principal executive offices in Irvine, California and common stock trading on NASDAQ under VERI. Veritone engages in the provision of AI computing solutions and services. The company went public on May 12, 2017, listing on NASDAQ under the ticker VERI with an offering price of $15.00 per share and raising approximately $37.5 million.

Veritone generates revenue through two primary segments: Software Products and Services, built around its flagship aiWARE platform, and Managed Services, encompassing content licensing and media-related offerings. The aiWARE platform orchestrates hundreds of AI and machine learning models to transform unstructured media into searchable, analyzable intelligence for enterprise customers across media, entertainment, law enforcement, government, and talent acquisition. The company reported total revenue of approximately $92.6 million for fiscal year 2024.” Remove the 2025 guidance unless separately sourced to an official filing or release. The complaint references Veritone’s announced relationships or contracts involving ESPN, CBS News, Newsmax, and public-sector customers. In the enterprise AI space, Veritone competes with companies such as C3.ai and specialized media AI providers like Moments Lab, Imagen, and Konan Technology.

Critically, according to the complaint, Veritone had a history of material weaknesses in its internal controls over financial reporting, including weaknesses identified during the preparation of annual reports for fiscal years 2022, 2023, and the quarter ended June 30, 2024. While the company publicly stated these weaknesses "did not result in any identified material misstatements" and that management was "committed to maintaining a strong control environment," the lawsuit alleges these assurances masked ongoing deficiencies that would ultimately force the company to restate its financial results.

Promises Made vs. Reality

The Class Period opened on October 14, 2025, with Veritone issuing a press release that trumpeted third-quarter 2025 preliminary results, including revenue between $28.5 million and $28.7 million, a 30.5% increase from the prior year. The release also celebrated the company's Veritone Data Refinery pipeline, claiming "bookings total nearly $40 million, an increase of 100% from August 2025." Two days later, the company filed a Form 8-K with the SEC reaffirming these figures and filed a Prospectus that incorporated the financial data by reference, embedding the allegedly misleading numbers into securities offering documents.

When full third-quarter results arrived on November 6, 2025, CEO Ryan Steelberg struck an even more confident tone. He told investors the company had achieved "core AI software revenue" growth of "more than 200%" and characterized the quarter as evidence of the "strength of the Veritone platform, aiWARE, and the growing demand for our solutions in key, high-growth verticals." The company reported Q3 revenue of $29.1 million and highlighted 27 enterprise software contracts, 82 public sector contracts across federal, state, and local agencies, and an expanded 15-year partnership with CBS News. Software Products and Services revenue reached $22.8 million, an increase of $8.2 million, or 55.5%, year over year.

The following day, November 7, 2025, Veritone filed its 3Q25 10-Q with the SEC. The quarterly report affirmed the previously announced financial results and reported the company's purported assets, expenses, and comprehensive income in detail. Notably, the filing addressed Veritone's previously disclosed material weakness in internal controls, acknowledging that the weakness "was not remediated as of September 30, 2025" but asserting it "did not result in any identified material misstatements to the financial statements." Management stated the company was "committed to maintaining a strong control environment" and that remediation efforts represented "continued improvement." On November 10, 2025, Veritone issued yet another press release clarifying certain non-cash expenses, reinforcing its narrative of strong operational performance with a non-GAAP net loss improvement of 47.8% year over year.

The complaint alleges that throughout these communications, defendants knew or recklessly disregarded that the company had inaccurately recorded and misclassified certain revenue and costs, that revenue, assets, accounts receivable, royalties, and other comprehensive income were overstated, that the company maintained deficient internal controls over accounting and financial reporting, and that the company would ultimately be forced to restate certain of its financial statements. As alleged in the complaint, the pattern of optimistic disclosures and reassurances about control improvements served to conceal that the Company had inaccurately recorded and misclassified certain revenue and costs, maintained deficient internal controls, and issued positive statements about its business that were materially misleading and lacked a reasonable basis.

Timeline of Alleged Misconduct and Disclosures

Class Period: October 14, 2025 - April 14, 2026, inclusive.

October 14, 2025: Class Period begins. Veritone issues a press release announcing preliminary Q3 2025 results, including revenue of $28.5 million to $28.7 million and VDR bookings of nearly $40 million.

October 15, 2025: VERI shares close at a Class Period high of $8.39.

October 16, 2025: Veritone files a Form 8-K (Item 8.01) reaffirming Q3 2025 preliminary results and files a Prospectus (Form 424B5) incorporating the financial data by reference.

November 6, 2025: Veritone announces full Q3 2025 results. Revenue reported at $29.1 million, up 32.4% year over year. CEO Steelberg touts "high level" execution and a path to profitability.

November 7, 2025: Company files 3Q25 10-Q with the SEC, affirming financial results and disclosing unremediated material weakness in internal controls while stating it did not cause material misstatements.

November 10, 2025: Veritone issues clarifying press release on Q3 non-cash expenses, reinforcing positive operational narrative.

March 26, 2026: Alleged Corrective Disclosure. After market close, Veritone announces limited Q4 2025 results with a revenue range of $18.1 million to $30.0 million. Discloses that it is finalizing accounting for certain revenue transactions under ASC 606, including a non-monetary software transaction with a negotiated price of $13.0 million but an estimated value as low as $0.4 million.

March 27, 2026: VERI falls $0.77, or 29.5%, to close at $1.84 on unusually heavy trading volume. April 1, 2026: Alleged Corrective Disclosure. Before market open, Veritone files Form NT 10-K, disclosing inability to timely file its annual report due to delays in finalizing ASC 606 accounting determinations. Reveals that Q3 2025 revenue may need to be reduced by $1.5 million to $2.5 million (5.2% to 8.6% of the previously reported $29.1 million). Discloses evaluation of whether Q2 and Q3 2025 financial statements may need to be revised or restated.

April 1, 2026: VERI falls $0.18, or 9.14%, to close at $1.79 on unusually heavy trading volume. April 14, 2026: Alleged Corrective Disclosure. After market close, Veritone files Form 8-K disclosing that Q3 2025 financial statements "should no longer be relied upon." Multiple errors identified: approximately $2.2 million revenue overstatement from an on-premise software valuation error; approximately $0.2 million and $0.9 million revenue overstatement for the three- and nine-month periods, respectively, and $0.1 million and $0.7 million royalties expense overstatement for those same periods, related to recognizing revenue prior to meeting step 1 under ASC 606 and clerical billing errors; misclassification of revenue and costs in agent transactions under ASC 606; and $1.5 million overstatement of accumulated other comprehensive income. Class Period ends.

April 15, 2026: VERI falls $0.19, or 8.3%, to close at $2.09 on unusually heavy trading volume. May 21, 2026: Complaint filed in the U.S. District Court for the Central District of California.

Investor Harm and Market Reaction

The largest pleaded stock decline occurred on March 27, 2026, when VERI plunged $0.77, or 29.5%, to close at $1.84 per share on unusually heavy trading volume. The sell-off followed Veritone's March 26 after-hours disclosure that the company was still finalizing its accounting determination for certain revenue transactions under ASC 606, a disclosure that cast immediate doubt on the reliability of the financial results investors had relied upon for months. The disclosure allegedly called into question the reliability of Veritone’s reported revenue.

The decline deepened on April 1, 2026, when VERI fell an additional $0.18, or 9.14%, to close at $1.79 per share on unusually heavy trading volume. The company's Form NT 10-K filing revealed not only that the annual report could not be filed on time, but that previously reported Q3 2025 revenue might need to be reduced by $1.5 million to $2.5 million, and that management was evaluating whether financial statements for both Q2 and Q3 2025 required revision or restatement.

On April 15, 2026, VERI fell $0.19, or 8.3%, to close at $2.09 per share on unusually heavy trading volume, following the April 14 disclosure that Q3 2025 financial statements should no longer be relied upon due to multiple accounting errors. The cumulative damage was staggering. From the Class Period high of $8.39 per share reached on October 15, 2025, VERI had fallen to $1.79 at its lowest post-disclosure close on April 1, 2026, a decline of approximately 78.7% based on complaint data. Investors who purchased Veritone securities during the Class Period allegedly did so at prices inflated by the company’s challenged third-quarter announcements and internal-control assurances.

Litigation & Procedural Posture

The complaint asserts claims under Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder against all defendants, and Section 20(a) of the Exchange Act against the Individual Defendants as controlling persons of Veritone. Defendants include Veritone, Inc., Ryan Steelberg (CEO), and Michael L. Zemetra (CFO).

Scienter allegations center on the Individual Defendants' positions as CEO and CFO, which gave them the power and authority to control the contents of the company's SEC filings, press releases, and investor communications. The complaint alleges that by virtue of their roles, the Individual Defendants had access to material non-public information, were provided with or had unlimited access to copies of the company's reports prior to issuance, and knew that adverse facts had not been disclosed. The complaint further alleges that defendants acted with actual knowledge of the misrepresentations or with reckless disregard for the truth. No insider trading activity or confidential witness testimony is cited in the complaint.

Procedurally, the case was filed on May 21, 2026, and seeks class certification under Federal Rule of Civil Procedure 23(a) and (b)(3) on behalf of all persons and entities that purchased or acquired Veritone securities during the Class Period and were damaged thereby. The complaint invokes the fraud-on-the-market presumption of reliance, noting that Veritone's shares actively traded on NASDAQ, the company filed periodic reports with the SEC, and the stock was followed by securities analysts. Lead plaintiff submissions are due July 20, 2026.

SEC Filings & Risk Factors

The complaint targets a series of SEC filings issued during the Class Period that collectively presented a misleading picture of Veritone's financial condition while acknowledging, but minimizing, known internal control deficiencies.

The 3Q25 10-Q, filed on November 7, 2025, is the central filing at issue. The quarterly report affirmed Q3 2025 revenue of $29.1 million and reported the company's assets, contract liabilities, accounts receivable, and comprehensive income in detail. The filing disclosed that a material weakness in internal controls over financial reporting, first identified during preparation of the Q2 2024 Form 10-Q, "was not remediated as of September 30, 2025." The filing characterized this weakness as relating to "a lack of an effective information and communication process that identified and assessed the source of and controls necessary to ensure the reliability of information used in financial reporting." Critically, the 10-Q stated this weakness "did not result in any identified material misstatements to the financial statements" and that management was "committed to maintaining a strong control environment" with remediation efforts representing "continued improvement." The complaint alleges these statements were misleading because the company allegedly had deficient internal controls and later disclosed multiple errors in its financial statements.

Additional material weaknesses dating to the fiscal years ended December 31, 2022 and 2023, relating to the consolidation process, foreign exchange transactions, and translation between Veritone and certain foreign subsidiaries, were also disclosed as unremediated. Here too, the 10-Q stated these weaknesses "did not result in any identified material misstatements." The April 14, 2026, Form 8-K would ultimately reveal that accumulated other comprehensive income was overstated by $1.5 million, or 246%, due to an error directly related to foreign currency translation, contradicting the prior assurances.

The October 16, 2025, Form 8-K (Item 8.01) reported preliminary Q3 2025 financial results, including expected revenue of $28.5 million to $28.7 million, net loss between $29.3 million and $19.3 million, and non-GAAP net loss between $5.5 million and $6.0 million. These figures were subsequently incorporated by reference into a Prospectus filed on the same date (Form 424B5), embedding the allegedly misleading financial data into securities offering documents.

The corrective filings stand in stark contrast to the Class Period disclosures. The March 26, 2026, press release revealed a Q4 2025 revenue range of $18.1 million to $30.0 million, an extraordinarily wide spread driven by unresolved ASC 606 accounting determinations. The April 1, 2026, Form NT 10-K disclosed potential out-of-period adjustments that would reduce Q3 2025 revenue by $1.5 million to $2.5 million, directly undermining the $29.1 million revenue figure previously reported. The April 14, 2026, Form 8-K catalogued the full scope of errors: a $2.2 million revenue overstatement from an on-premise software valuation error (approximately 8% of Q3 revenue as previously reported), revenue overstatements of approximately $0.2 million and $0.9 million for the three- and nine-month periods, respectively, related to recognizing revenue prior to meeting step 1 under ASC 606 and clerical billing errors, with corresponding royalties expense overstatements of $0.1 million and $0.7 million, misclassification of revenue and costs in transactions where Veritone acted as an agent under ASC 606, and a $1.5 million overstatement of accumulated other comprehensive income representing 246% of the previously reported figure.

The complaint frames these filings as showing an alleged disconnect between Veritone’s public assurances and the later-disclosed accounting errors. The risk factor disclosures acknowledged the existence of material weaknesses, but the complaint alleges they were rendered misleading by the simultaneous assurances that these weaknesses had not produced material misstatements, when in fact they had. The later-disclosed errors affected several significant financial-statement items, including revenue, costs, accounts receivable, royalties, assets, and accumulated other comprehensive income.

How to Join the Veritone, Inc. (VERI) Class Action

• Confirm you purchased VERI shares during the October 14, 2025 to April 14, 2026 class period
• Review the allegations and eligibility requirements in the pending securities class action
• Gather trade confirmations and brokerage records documenting purchases or losses
• Consult counsel regarding lead plaintiff deadlines, eligibility, and potential rights
• Click here to check eligibility

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