Eargo, Inc. Securities Lawsuit Investigation
Hearing aid manufacturer shares drop 68% following announcement of criminal investigation
On Wednesday, September 22, hearing aid manufacturer Eargo (NASDAQ: EAR) announced that it is being investigated by the U.S. Department of Justice. As reported by The Street, Eargo admitted in an SEC filing that the investigation is centered around “insurance reimbursement claims the Company has submitted on behalf of its customers covered by federal employee health plans.”
As a result of the criminal investigation, Eargo Inc. Stock dropped 68% on September 22, 2021, causing significant harm to investors.
Lost money in Eargo stock?
You may be eligible to recover your losses. Get a free and confidential consultation.
(Please provide number of shares, purchase date, and estimated losses.)
Eargo Subject to Ongoing Audit by Company's Largest Third-Party Payor
Eargo is a medical device manufacturer for the hearing loss community, and its rechargeable hearing aids range in cost from $1,500 to $3,000 per pair.
On Wednesday, September 22, 2021, hearing aid company Eargo disclosed in an SEC filing that it was the target of a criminal investigation by the U.S. Department of Justice (DOJ). Eargo said the investigation was concerning “insurance reimbursement claims” it had submitted on behalf of “customers covered by federal employee health plans.”
Eargo further disclosed that the DOJ was now the “principal contact” behind an ongoing claims audit by an insurance company, an audit Eargo first announced in its Q2 2021 press release on August 12, 2021. In that press release, Eargo had described the insurance company as its “largest third-party payor,” accounting for 80% of Eargo’s gross accounts receivable as of June 30, 2021, and said that as a result of the audit, claims dating back to March 1, 2021 had not yet been paid.
According to The Motley Fool, in August, Eargo had even increased increased its revenue forecast for 2021 from between $89 million and $93 million to between $93 million and $96 million back in August. But in light of the federal government’s criminal investigation, Eargo has now withdrawn its guidance for the rest of 2021.
Our Securities Lawyers Have a Winning Record Against Companies Like Eargo
Our securities lawyers have recovered over a billion dollars on behalf of our clients against behemoths, such as Chase Bank, Mastercard, and Anthem Blue Cross Blue Shield. Read more about our results.
You “shouldn’t presume that powerful banks and other powerful interests can just get away with doing bad things. Good, qualified counsel that are committed to a cause can usually figure out how to prosecute such cases effectively and prevail.”
–Eric Gibbs, award-winning securities attorney
Praise from the Courts
Federal judge in our AT&T class action:
“I’ve always found them to be extraordinary counsel in terms of their preparation and their professionalism.”
Federal judge in our Chase lawsuit (resulting in $100 million settlement):
They “fought tooth and nail, down to the wire” to achieve “the best settlement that they could under the circumstances.”
Read more about what judges say about us.
Our Featured Securities Team
Eileen Epstein Carney
Eileen represents investors and consumers harmed by financial fraud and other corporate misconduct. She also executes on the firm's strategic vision.
View full profileDave Stein
Dave represents clients in cases nationwide, ranging from securities and financial fraud cases to product liability, privacy, and data breach suits.
View full profileAmanda Karl
Amanda represents employees, consumers, and sexual assault survivors in complex class actions. She also leads the firm’s Voting Rights Task Force.
View full profileGibbs Law Group's Financial Fraud Experience
We have fought some of the most complex cases brought under federal and state laws nationwide, and our attorneys have been recognized with numerous awards and honors for their accomplishments, including Top 100 Super Lawyers in Northern California, Top Plaintiff Lawyers in California, The Best Lawyers in America, and rated AV Preeminent (among the highest class of attorneys for professional ethics and legal skills).
