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UPDATED ALERT: Eargo, Inc. Investors with Substantial Losses Have Opportunity to Lead Class Action Lawsuit

By: Robbins Geller Rudman & Dowd LLP via Business Wire

November 12, 2021 at 13:37 PM EST

Robbins Geller Rudman & Dowd LLP announces that purchasers or acquirers of: (a) Eargo, Inc. (NASDAQ: EAR) shares in or traceable to Eargo’s initial public offering conducted on or around October 15, 2020 (“IPO”); and/or (b) Eargo securities between October 15, 2020 and September 22, 2021, inclusive (the “Class Period”) have until December 6, 2021 to seek appointment as lead plaintiff in Fazio v. Eargo, Inc., No. 21-cv-07848 (N.D. Cal.). Originally commenced on October 6, 2021, the Eargo class action lawsuit now charges Eargo, certain of its top executives and directors, as well as the underwriters of Eargo’s IPO with violations of the Securities Act of 1933 and/or Securities Exchange Act of 1934.

If you wish to serve as lead plaintiff of the Eargo class action lawsuit, please provide your information by clicking here. You can also contact attorney J.C. Sanchez of Robbins Geller by calling 800/449-4900 or via e-mail at jsanchez@rgrdlaw.com. Lead plaintiff motions for the Eargo class action lawsuit must be filed with the court no later than December 6, 2021.

CASE ALLEGATIONS: Eargo, a medical device company, claims that its hearing aids “are the first and only virtually invisible, rechargeable, completely-in-canal, [U.S. Food and Drug Administration]-regulated, exempt Class I and Class II devices for the treatment of hearing loss.”

The Eargo class action lawsuit alleges that, in the offering materials used in connection with the IPO and throughout the Class Period, defendants made false and misleading statements regarding the extent of available insurance coverage for Eargo’s products and how that coverage purportedly drove Eargo’s earnings and growth. In addition, the Eargo class action lawsuit alleges that defendants failed to disclose that: (i) Eargo had improperly sought reimbursements from certain third-party payors; (ii) the foregoing was reasonably likely to lead to regulatory scrutiny; (iii) as a result and because the reimbursements at issue involved Eargo’s largest third-party payor, Eargo’s financial results would be adversely impacted; and (iv) consequently, defendants’ positive statements about Eargo’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.

On August 12, 2021, Eargo revealed that claims submitted to Eargo’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, Eargo’s share price fell by more than 24%.

Then, on September 22, 2021, 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 Eargo’s largest third-party payor. As a result, Eargo withdrew its full year financial guidance. On this news, Eargo’s share price fell by an additional 68%, further damaging investors.

THE LEAD PLAINTIFF PROCESS: The Private Securities Litigation Reform Act of 1995 permits any investor who purchased: (a) Eargo shares in or traceable to Eargo’s IPO; and/or (b) Eargo securities during the Class Period to seek appointment as lead plaintiff in the Eargo class action lawsuit. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members in directing the Eargo class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Eargo class action lawsuit. An investor’s ability to share in any potential future recovery of the Eargo class action lawsuit is not dependent upon serving as lead plaintiff.

ABOUT ROBBINS GELLER RUDMAN & DOWD LLP: With 200 lawyers in 9 offices nationwide, Robbins Geller Rudman & Dowd LLP is the largest U.S. law firm representing investors in securities class actions. Robbins Geller attorneys have obtained many of the largest shareholder recoveries in history, including the largest securities class action recovery ever – $7.2 billion – in In re Enron Corp. Sec. Litig. The 2020 ISS Securities Class Action Services Top 50 Report ranked Robbins Geller first for recovering $1.6 billion for investors last year, more than double the amount recovered by any other securities plaintiffs’ firm. Please visit http://www.rgrdlaw.com for more information.

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