A federal judge in New Jersey has dismissed the securities complaint filed against Cross River Bank, granting the bank’s motion to dismiss in full while allowing the plaintiff an opportunity to amend. The March 31, 2026, Order dismissed the complaint without prejudice, meaning the plaintiff may attempt to replead the claims after the Court issues its forthcoming opinion.
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The case concerns allegations brought on behalf of investors who purchased or otherwise acquired securities of Sunlight Financial Holdings, Inc., formerly known as Spartan Acquisition Corp. II, between January 25, 2021, and October 31, 2023. According to the complaint, Sunlight operated a technology-enabled point-of-sale financing platform that helped residential solar and home-improvement contractors offer financing to customers.
For investors following the case, the ruling means the current complaint cannot proceed as filed, but the plaintiff may attempt to revive the litigation through an amended pleading.
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Background on the Allegations
The lawsuit alleged that Cross River Bank (“CRB”) served as Sunlight’s bank partner for certain indirect-channel loans. According to the complaint, those loans were funded on CRB’s balance sheet and later intended to be pooled and sold to indirect-channel capital providers.
The complaint alleged that Sunlight retained economic exposure to certain funded but unsold loans, including what it described as the CRB “Backbook.” Plaintiff further alleged that, as interest rates rose, those loans became difficult to sell except at a discount, while CRB allegedly allowed Sunlight to exceed lending limits and later amend lending agreements.
The complaint also identified alleged corrective disclosures concerning an advance receivable impairment, deterioration in the market for indirect-channel loans, and Sunlight’s Chapter 11 bankruptcy filing. These allegations have not been proven, and the Court’s March 31 Order dismissed the complaint in full at the pleading stage.
Court Grants Motion to Dismiss in Full
On March 31, 2026, U.S. District Judge Esther Salas granted CRB’s motion to dismiss in full. The Order dismissed the complaint without prejudice, meaning the complaint was rejected in its current form, but the plaintiff may attempt to plead the claims again.
The Order did not set out the Court’s reasoning in detail. It also stated that any amended complaint must cure the deficiencies identified by the Court.
Plaintiff Given 30 Days to Refile
The plaintiff may file a second amended complaint within 30 days after the forthcoming opinion is issued. Any amended pleading would need to address the deficiencies identified by the Court. If no amended complaint is filed, the dismissal could bring the case to an end at the trial court level.
What This Means for Investors
For investors, the ruling is procedural rather than a final decision on the underlying allegations. The Court did not decide whether CRB is liable, nor did it make a final merits determination about the plaintiff’s claims.
At the motion-to-dismiss stage, courts evaluate whether a complaint pleads enough facts to proceed under the applicable legal standards. In securities cases, that analysis often includes heightened pleading requirements. Here, the short March 31 Order confirms only that the current complaint was dismissed without prejudice.
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What Happens Next
The next key development will be the Court’s forthcoming opinion, which is expected to explain why the complaint was dismissed and what the plaintiff must address if he chooses to file a second amended complaint.
If an amended complaint is filed, CRB may have another opportunity to challenge the revised pleading. If no amended complaint is filed within the allowed timeframe, the case could end at the district court level.
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