Investors Cautioned as Zynex Faces Shareholder Lawsuit After Bankruptcy and Fraud Charges

National shareholder rights law firm, Hagens Berman, has recently alerted investors regarding a securities class action lawsuit filed against Zynex, Inc. (stock symbols ZYXI and ZYXIQ) alongside several of its former top executives. This lawsuit emerges from serious allegations linked to a systemic overbilling scheme and the company’s subsequent bankruptcy filing. Having declared bankruptcy due to massive financial turmoil and corporate malfeasance, Zynex's situation serves as a cautionary tale for investors in the medical supply sector and beyond.

On March 16, 2026, it was disclosed that Hagens Berman is formally inviting investors who have suffered significant losses in Zynex's stock to take action. The class action lawsuit, titled Beidel v. Sandgaard, et al., is currently being litigated in the U.S. District Court for the District of Colorado and aims to recover losses for all individuals and entities that purchased Zynex securities from February 25, 2021, to December 15, 2025.

The essence of the allegations revolves around a fraudulent practice that led to Zynex inflating its revenue through deceptive means. According to Reed Kathrein, a leading partner at Hagens Berman working on this case, the crux of the lawsuit accuses Zynex of misleading the market regarding its revenue sources. Instead of genuine market demand, the growth presented by Zynex was allegedly underpinned by a predatory oversupplying scheme targeting patients and deceiving payors.

Key Allegations in the Litigation

1. Systematic Overbilling: The complaint suggests that Zynex engaged in a scheme where they provided excessive medical supplies—according to reports, up to 128 electrode pairs monthly—regardless of the patients’ medical needs. This was allegedly intended to inflate billings to both government and private payors, ultimately impacting the financial health of the company.

2. Inadequate Internal Controls: The lawsuit claims that Zynex operated without adequate internal controls, allowing significant manipulation of supply orders and billing data. This failure to maintain checks and balances paved the way for widespread fraudulent practices that have left investors reeling.

3. Suspension by Tricare: In early 2025, Zynex's main payer, Tricare, halted payments due to these suspicious practices. The allegation suggests that the management team concealed the full extent of this payment suspension, which eventually compelled the company to agree to a massive forfeiture of over $85 million to resolve the fraud claims.

4. Criminal Indictments: The situation escalated further when, on January 21, 2026, Zynex’s former CEO Thomas Sandgaard and former COO Anna Lucsok were indicted for various counts of healthcare and securities fraud. Their indictment is a testament to the severity of the claims against the company and the actions undertaken by key executives.

5. Total Value Destruction: Following the revelations of this alleged misconduct and the subsequent forfeiture, Zynex's stock faced catastrophic losses that culminated in a Chapter 11 bankruptcy filing, resulting in near-total losses for many equity holders.

Critical Deadline for Investors

For those who purchased shares of Zynex stock during the specified Class Period, it’s crucial to note that April 21, 2026, is the deadline to request appointment as Lead Plaintiff in the lawsuit. Given the circumstances surrounding the bankruptcy and the fraud allegations, this may be an important opportunity for investors to recoup some of their losses.

The firm is encouraging Zynex investors to submit their losses and to reach out for assistance through the proper channels. Interested parties can contact Reed Kathrein at 844-916-0895 or email [email protected] for further inquiries or to share information that may assist in the ongoing investigation. As stated by Hagens Berman, “whistleblowers holding non-public information about Zynex are urged to explore their options”, including participation in the SEC Whistleblower program.

A Final Note on Corporate Accountability

Hagens Berman is recognized as a robust legal entity advocating for corporate accountability, representing various stakeholders such as investors, whistleblowers, and consumers. With a history of securing over $2.9 billion in judgments for clients affected by corporate negligence, the firm underscores the importance of transparency and accountability in the corporate world. For continual updates on this case and others, follow Hagens Berman’s updates at @ClassActionLaw.

In summary, the unfolding situation at Zynex serves as a stark reminder of the fragile nature of investor trust in corporate governance and the significant repercussions of unchecked fraud.