LOS ANGELES, Oct. 20, 2021 /PRNewswire/ -- The Law Offices of Frank R. Cruz announces that a class action lawsuit has been filed on behalf of persons and entities that purchased or otherwise acquired Eargo, Inc. ("Eargo" or the "Company") (NASDAQ: EAR) securities between February 25, 2021 and September 22, 2021, inclusive (the "Class Period"). Eargo investors have until December 6, 2021to file a lead plaintiff motion.
If you are a shareholder who suffered a loss, click here to participate.
On August 12, 2021, after the market closed, Eargo revealed that claims submitted to the Company's largest third-party payor, which accounted for 80% of Eargo's accounts receivable, had not been paid since March 1, 2021.
On this news, the Company's share price fell $8.00, or over 24%, to close at $24.70 per share on August 13, 2021, on unusually heavy trading volume.
On September 22, 2021, after the market closed, Eargo revealed that "it is the target of a criminal investigation by the U.S. Department of Justice (the 'DOJ') related to insurance reimbursement claims the Company has submitted on behalf of customers covered by federal employee health plans." Moreover, the DOJ is the "principal contact related to the subject matter of the [ongoing] audit" of Eargo by an insurance company that is the Company's largest third-party payor. As a result of the foregoing, Eargo withdrew its full year financial guidance.
On this news, the Company's share price fell $14.81, or over 68%, to close at $6.86 per share on September 23, 2021, on unusually heavy trading volume.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that Eargo had improperly sought reimbursements from certain third-party payors; (2) that the foregoing was reasonably likely to lead to regulatory scrutiny; (3) that, as a result and because the reimbursements at issue involved the Company's largest third-party payor, Eargo's financial results would be adversely impacted; and (4) as a result, Defendants' statements about its business, operations, and prospects were materially false and misleading and/or lacked reasonable basis at all relevant times.
If you purchased Eargo securities during the Class Period, you may move the Court no later than December 6, 2021to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you purchased Eargo securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Frank R. Cruz, of The Law Offices of Frank R. Cruz, 1999 Avenue of the Stars, Suite 1100, Los Angeles, California 90067 at 310-914-5007, by email to [email protected], or visit our website at www.frankcruzlaw.com. If you inquire by email please include your mailing address, telephone number, and number of shares purchased.
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SOURCE The Law Offices of Frank R. Cruz, Los Angeles