NEW YORK, December 04, 2021 (GLOBE NEWSWIRE) – Faruqi & Faruqi, LLP, a leading national securities law firms, is investigating potential claims against Eargo, Inc. (âEargoâ or the âCompany (NASDAQ: EAR) and reminds investors of the December 6, 2021 deadline to apply for the role of lead plaintiff in a federal securities class action lawsuit that has been filed against the Company.
If you suffered losses greater than $ 500,000 while investing in Eargo stocks or options between October 15, 2020 and September 22, 2021 and want to discuss your legal rights, call partner Faruqi & Faruqi Josh Wilson directly To 877-247-4292 Where 212-983-9330 (ext. 1310). You can also click here for more information: www.faruqilaw.com/EAR.
There is no cost or obligation for you.
Faruqi & Faruqi is a leading national minority and women-owned securities law firm, with offices in New York City, Pennsylvania, California and Georgia.
As detailed below, the lawsuit focuses on whether the Company and its officers violated federal securities laws by making false and / or misleading statements and / or failing to disclose that: (1 ) that Eargo had wrongly requested refunds from certain third-party payers; (2) that the foregoing was reasonably likely to lead to regulatory review; (3) that as a consequence and because the repayments in question involved the Company’s largest third party payer, the financial results of Eargo would be adversely affected; (4) Eargo has made numerous false and misleading statements regarding the extent of insurance coverage available for Eargo’s products and the manner in which such coverage has allegedly boosted the earnings and growth of the Company; (5) The company touted its advertising as a key source of growth among insurance clients, including advertisements directly targeting federal employees and retirees, who allegedly grew Eargo’s customer base at low marginal cost (6) which, due to the foregoing, the positive statements by the defendants about the business, operations and prospects of the Company were misleading and / or lacked a reasonable basis.
On August 12, 2021, after the market closed, Eargo revealed that claims submitted to the Company’s largest third party payer, which represented 80% of Eargo’s accounts receivable, had not been paid since March 1, 2021.
Following this news, the company’s stock price fell $ 8.00, or more than 24%, to close at $ 24.70 per share on August 13, 2021, on unusually high trading volume.
On September 22, 2021, after market hours, Eargo revealed that “she is the target of a criminal investigation by the United States Department of Justice (the ‘DOJ’) into insurance claims that the Company submitted on behalf of its clients covered by federal employee health plans. The Company further stated that â[a]As previously indicated, the Company has been subject to an audit of outstanding claims by an insurance company which is the Company’s largest third party payer. The company has been informed by the insurance company that the DOJ is now the primary contact related to the subject of the audit. Finally, the Company announced that it “is withdrawing its financial forecasts for the year ending December 31, 2021”.
At this news, Eargo’s shares fell about 60% on after-hours trading on September 22, 2021 and pre-market trading on September 23, 2021, hurting investors.
The principal plaintiff appointed by the court is the investor with the greatest financial interest in the remedy sought by the group who is suitable and typical of the members of the group who are directing and supervising the litigation on behalf of the putative group. Any putative class member can propose to the court to serve as lead plaintiff through any lawyer they choose, or they can choose to do nothing and remain an absent member of the class. Your ability to participate in any recovery is not affected by the decision whether or not to serve as the principal applicant.
Faruqi & Faruqi, LLP also encourages anyone with information regarding Eargo’s conduct to contact the company, including whistleblowers, former employees, shareholders and others.
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