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Press release content from Business Wire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Business Wire
Press release content from Business Wire. The AP news staff was not involved in its creation.

INVESTOR ALERT: Law Offices of Howard G. Smith Announces the Filing of a Securities Class Action on Behalf of Eargo, Inc. (EAR) Investors

October 7, 2021 GMT

BENSALEM, Pa.--(BUSINESS WIRE)--Oct 7, 2021--

Law Offices of Howard G. Smith announces that a class action lawsuit has been filed on behalf of investors who purchased Eargo, Inc. (“Eargo” or the “Company”) (NASDAQ: EAR ) securities between February 25, 2021 and September 22, 2021, inclusive (the “Class Period”). Eargo investors have until December 6, 2021 to file a lead plaintiff motion.

Investors suffering losses on their Eargo investments are encouraged to contact the Law Offices of Howard G. Smith to discuss their legal rights in this class action at 888-638-4847 or by email to howardsmith@howardsmithlaw.com.

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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 filed in this class action 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: (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.

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If you purchased Eargo securities, have information or 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 Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020, by telephone at (215) 638-4847, toll-free at (888) 638-4847, or by email to howardsmith@howardsmithlaw.com, or visit our website at www.howardsmithlaw.com.

This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.

View source version on businesswire.com:https://www.businesswire.com/news/home/20211007005850/en/

CONTACT: Law Offices of Howard G. Smith

Howard G. Smith, Esquire

215-638-4847

888-638-4847

howardsmith@howardsmithlaw.com

www.howardsmithlaw.com

KEYWORD: UNITED STATES NORTH AMERICA PENNSYLVANIA

INDUSTRY KEYWORD: LEGAL PROFESSIONAL SERVICES

SOURCE: Law Offices of Howard G. Smith

Copyright Business Wire 2021.

PUB: 10/07/2021 12:39 PM/DISC: 10/07/2021 12:39 PM

http://www.businesswire.com/news/home/20211007005850/en