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NEW YORK, December 06, 2021--(BUSINESS WIRE)--Bragar Eagel & Squire, P.C., a nationally recognized stockholder rights law firm, reminds investors that a class action lawsuit has been filed against Eargo, Inc. ("Eargo" or the "Company") (NASDAQ: EAR) in the United States District Court for the Northern District of California on behalf of all persons and entities who purchased or otherwise acquired Eargo securities between October 15, 2020 and September 22, 2021, both dates inclusive (the "Class Period") or pursuant and/or traceable to the October 15, 2020 IPO. Investors have until December 6, 2021 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
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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 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, the complaint alleges that 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 or otherwise acquired Eargo shares and suffered a loss, are a long-term stockholder, have information, 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 Brandon Walker or Alexandra Raymond by email at email@example.com, telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.
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