NEW YORK, Nov. 25, 2021 /PRNewswire/ -- Pomerantz LLP announces that a class action lawsuit has been filed against Eargo, Inc. ("Eargo" or the "Company") (NASDAQ: EAR) and certain of its officers. The class action, filed in the United States District Court for the Northern District of California, and docketed under 21-cv-08597, is on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired Eargo securities between February 25, 2021 and September 22, 2021, inclusive (the "Class Period"). Plaintiff pursues claims against the Defendants under the Securities Exchange Act of 1934 (the "Exchange Act").
If you are a shareholder who purchased Eargo securities during the Class Period, you have until December 6, 2021 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at firstname.lastname@example.org or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
Eargo is a medical device company. The Company claims that its hearing aids "are the first and only virtually invisible, rechargeable, completely-in-canal, FDA-regulated, exempt Class I and Class II devices for the treatment of hearing loss."
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, Defendants failed to disclose to investors: (i) that Eargo had improperly sought reimbursements from certain third-party payors; (ii) that the foregoing was reasonably likely to lead to regulatory scrutiny; (iii) 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 (iv) that, as a result of the foregoing, Defendants' positive statements about the Company's business, operations, and prospects were materially 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 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.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com.
Robert S. Willoughby
888-476-6529 ext. 7980
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SOURCE Pomerantz LLP