Eargo, Inc. (EAR) Failed to Disclose It Improperly Sought Reimbursements From Third-Party Payors
A shareholder filed a class action on behalf of all persons and entities that purchased or otherwise acquired Eargo, Inc. (NASDAQ: EAR) securities between February 25, 2021 and September 22, 2021, for violations of the Securities Exchange Act of 1934. Eargo is a medical device company that produces hearing aids.
According to the complaint, on August 12, 2021, 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 stock fell $8.00, or over 24%, to close at $24.70 per share on August 13, 2021. Then, on September 22, 2021, Eargo revealed “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, Eargo withdrew its full year guidance. On this news, Eargo’s shares feel $14.81, or over 68%, to close at $6.86 per share on September 23, 2021. The stock has yet to recover.
If you purchased shares of Eargo, Inc. (EAR) between February 25, 2021 and September 22, 2021, you have until December 6, 2021, to ask the court to appoint you lead plaintiff for the class.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.