#USA #Class Action #San Francisco #Zynex #Hagens Berman

Investors Warned of Securities Fraud in Zynex Case

In a significant legal development, the national shareholder rights law firm Hagens Berman is alerting investors about a class action lawsuit against Zynex, Inc. (NASDAQ: ZYXI / ZYXIQ) amid allegations of systematic fraud and a scheme to inflate revenues through excessive medical supply charges. This comes on the heels of Zynex’s bankruptcy filing and subsequent revelations of misconduct that have led to serious financial fallout for many investors.

Overview of the Allegations

The lawsuit, titled Beidel v. Sandgaard, et al., was filed in the U.S. District Court for the District of Colorado, highlighting the gravity of the accusations against Zynex and its former executives. It is claimed that Zynex misled investors by falsely portraying their revenue growth as genuine demand-driven growth while, in reality, it was the result of questionable practices involving excessive billing of government and private payors.

According to the firm, Zynex allegedly engaged in a gross overbilling scheme. The complaint outlines how the company shipped huge quantities of medical supplies to patients—sometimes as many as 128 pairs of electrodes per month—regardless of clinical necessity, with the aim of maximizing reimbursements. This practice not only jeopardized patient care but also manipulated billing practices that ultimately resulted in massive losses for shareholders after the truth came to light.

Background of the Lawsuit

Zynex’s financial troubles escalated dramatically when its primary payor, Tricare, suspended payments after discovering the extensive overbilling. The management is accused of concealing the extent of this suspension, leading to a dramatic forfeiture of over $85 million to resolve investigations into fraud allegations. Legal troubles intensified when former CEO Thomas Sandgaard and former COO Anna Lucsok faced criminal indictments for healthcare and securities fraud, prompting their departure from the company and serving as catalysts for the company's deterioration.

These unsettling revelations resulted in Zynex filing for Chapter 11 bankruptcy and being delisted from the Nasdaq exchange, causing substantial losses for investors who held equity in the company. The scale of the financial destruction has drawn concern from Hagens Berman, and they are actively seeking to represent investors who have faced losses due to these developments.

Importance of the Class Action

Hagens Berman is urging affected investors to act promptly. Any individual or entity that acquired Zynex securities during the class period, which spans from February 25, 2021, to December 15, 2025, is encouraged to register as a lead plaintiff in the class action. The deadline to file as lead plaintiff is set for April 21, 2026.

“Zynex's practices were intended to artificially inflate their financial standings, which constitutes a serious violation of federal securities laws,” stated Reed Kathrein, a partner at Hagens Berman leading this investigation. “This lawsuit aims to hold the company and its executives accountable for their actions and recover losses for investors.”

Additionally, whistleblowers with inside information about Zynex are encouraged to come forward. The SEC has implemented programs that reward whistleblowers for providing information regarding securities violations, which could yield significant financial benefits for those who participate.

Conclusion

Hagens Berman’s focus on corporate accountability emphasizes the importance of this class action lawsuit, as investors are given an opportunity to seek redress for their losses. As the case unfolds in the coming months, it provides a critical examination of corporate governance practices, market integrity, and investor protection. Those interested in more details and updates on the lawsuit can visit the law firm’s dedicated page to Zynex cases.

For investors, staying informed and proactive is essential in light of these troubling developments. As the complexities of this case unravel, Hagens Berman remains at the forefront of ensuring justice for affected stakeholders.