Zynex under scrutiny as class action lawsuit filed for securities fraud
- Glancy Prongay & Murray LLP has initiated a class action lawsuit against Zynex Inc. in Colorado.
- Zynex is accused of inflating revenues through unethical supply practices and misleading investors.
- The lawsuit follows significant stock declines linked to negative media reports and financial disclosures.
In the United States, a class action lawsuit has been filed against Zynex, Inc. by the law firm Glancy Prongay & Murray LLP on March 20, 2025. This legal action claims that Zynex engaged in deceptive practices regarding the distribution of medical supplies, specifically by oversupplying batteries and electrode pads, which allegedly inflated the company’s reported revenues. The lawsuit covers allegations that Zynex misled investors about its operational integrity, leading to a stock price decline following negative media coverage and significant financial transparency issues. Notably, a report published by the medical journal STAT on June 4, 2024, accused Zynex of engaging in unethical billing practices that resulted in insurers, including Tricare, withdrawing from partnerships with the company. The report suggested that Zynex had shipped excessive supplies to patients in order to claim larger reimbursements from healthcare providers. This behavior contributed to a 5% drop in Zynex's stock price amid heavy trading on the day the news broke. Subsequent financial results released by Zynex on March 11, 2025, revealed a considerable shortfall in revenue for the fourth quarter of 2024, attributed to uncharacteristically delayed payments from payers, particularly Tricare, which indicated a suspension of payments while reviewing past claims. This did not only inspire skepticism amongst investors but also prompted a drastic decline of over 51% in the stock price, fueled by the revelation of these financial struggles and previous allegations. The class action suit seeks to hold the company accountable for making materially false statements and failing to disclose negative information to investors during the period from March 13, 2023, to March 11, 2025. The damages from the misleading statements and the subsequent impact on stock trading represent serious concerns for anyone that invested in Zynex securities during this time frame. Investors are encouraged to act within 60 days of the lawsuit notice to appoint a lead plaintiff and secure representation in this matter, as the implications of the litigation unfold in court.