SAN FRANCISCO, Nov. 29, 2021 (GLOBE NEWSWIRE) -- Hagens Berman urges Eargo, Inc. (NASDAQ: EAR) investors with losses in excess of $500,000 to submit your losses now.
Eargo, Inc. (EAR) Securities Fraud Class Action:
Eargo, a hearing aid manufacturer, targets consumers with hearing aid insurance, and provides insurance claims processing for these customers. Consequently, a significant portion of Eargo’s accounts receivables is insurance reimbursement claims the Company has submitted to government-sponsored healthcare and private insurance.
The complaint alleges that Defendants misled investors between Oct. 15, 2021 – Sept. 22, 2021 concerning the extent of available insurance coverage for Eargo’s products and how that coverage purportedly drove the company’s earnings and growth.
More specifically, according to the complaint, Eargo and senior management failed to disclose that (1) Eargo improperly sought reimbursements from certain third-party payors, (2) the foregoing was reasonably likely to lead to regulatory scrutiny, and (3) 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.
The complaint alleges investors began to learn the truth on Aug. 12, 2021, when in reporting its Q2 2021 financial results, Eargo revealed that its largest third-party payor was conducting a claims audit and had not paid Eargo since March 1, 2021.
Then, on Sept. 22, 2021, Eargo announced it is the target of a criminal investigation by the DOJ related to insurance reimbursement claims the company submitted on behalf of customers covered by Federal employee health plans. The company also announced its withdrawal of increased FY 2021 revenue guidance given to investors during its Aug. 12, 2021 Q2 2021 earnings call.
“We’re focused on investors’ losses and proving Eargo lied about its compliance with applicable laws and its revenue recognition practices,” said Reed Kathrein, the Hagens Berman partner leading the investigation.
If you invested in Eargo, or have knowledge that may assist the firm’s investigation, click here to discuss your legal rights with Hagens Berman.
Whistleblowers: Persons with non-public information regarding Eargo should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email EAR@hbsslaw.com.
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Reed Kathrein, 844-916-0895