By Colin Kellaher
Eargo Inc. shares surged more than 50% on Thursday after the hearing-aid maker said a criminal investigation by the U.S. Department of Justice related to insurance reimbursement claims is no longer active.
In a filing with the Securities and Exchange Commission, the San Jose, Calif., company said the DOJ's investigation has been referred to the department's civil division and the U.S. Attorney's Office for the Northern District of Texas.
Eargo shares plummeted in September after the company reported that it was the target of a DOJ criminal investigation related to insurance reimbursement claims it submitted on behalf of customers covered under the Federal Employee Health Benefits program.
The company in November said it had received total payments of about $44 million from the government related to claims submitted under the program.
Last month, Eargo said it was cutting its workforce by 25% to 30% in response to declines in customer orders since it announced the investigation.
Eargo on Thursday said it is continuing to cooperate with the probe.
The DOJ's civil division brings suits on behalf of the U.S., primarily to recoup money lost through fraud, loan defaults and the abuse of federal funds, according to the DOJ website.
Shares of Eargo, which hit an all-time low of $4.49 last month, were recently changing hands at $6.86, up 50%. The stock is still almost 90% below its 52-week high of $76.75 reached last February.
Write to Colin Kellaher at email@example.com
(END) Dow Jones Newswires
January 06, 2022 11:11 ET (16:11 GMT)Copyright (c) 2022 Dow Jones & Company, Inc.