LifeMD Faces Class Action Lawsuit for Alleged Misleading Financial Practices
LifeMD, a well-known telehealth provider, is under legal fire as a new federal securities fraud class action lawsuit has emerged against it. The lawsuit, initiated by Hagens Berman in the Eastern District of New York, accuses LifeMD of misrepresenting its financial health and growth potential to investors. This controversy arose following a significant drop in the company's stock price in August after an earnings report revealed disappointing results.
This lawsuit, dubbed Johnston v. LifeMD, Inc., covers the time frame from May 7 to August 5, 2025, during which the firm reportedly issued misleading statements regarding its financial standing. Investors allege that on May 6, when LifeMD reported its first-quarter results, it was overly optimistic about its future revenue and EBITDA, citing a strong market position through its RexMD brand and a supposed 'competitive moat' in virtual obesity care. However, these claims are said to have concealed substantial operational issues facing the company.
Key allegations include rising customer acquisition costs significantly affecting the RexMD segment and a higher-than-expected refund rate associated with its weight management services. These challenges were not disclosed to investors, masking the underlying troubles the company was experiencing.
The narrative took a turn on August 5, 2025, when LifeMD released its second-quarter results. The numbers fell short of expansion expectations, leading to a downward adjustment of the company's full-year guidance. During this earnings call, management pointed to "temporary elevated customer acquisition costs" and refund complications as primary factors for the disappointing performance. This announcement resulted in LifeMD's stock plummeting by over 44%, prompting investors who faced notable losses to consider legal recourse.
The legal firm Hagens Berman, known for its focus on corporate accountability, is leading the investigation into these claims. Reed Kathrein, a partner at the firm, stated, "We are looking into whether LifeMD was aware of crucial operational issues yet failed to inform its investors."
For investors who have experienced financial losses during the specified period, participation in this class action lawsuit could present a path to recover damages incurred due to perceived fraud. The deadline for investors to assert their claims in this case is October 27, 2025.
Additionally, whistleblower opportunities may be available for individuals with confidential information related to LifeMD's operations. Those who provide original insights that benefit the ongoing investigation can potentially benefit from the SEC Whistleblower program, which offers rewards totaling up to 30 percent of any successful recovery achieved by the SEC.
LifeMD's situation highlights the importance of transparency and honesty in corporate communications, especially within the fast-evolving healthcare and telehealth sectors. As more details unfold in this case, investors and industry observers will be watching closely to ensure that accountability is upheld and that justice is served for those affected by these troubling allegations.
This lawsuit, dubbed Johnston v. LifeMD, Inc., covers the time frame from May 7 to August 5, 2025, during which the firm reportedly issued misleading statements regarding its financial standing. Investors allege that on May 6, when LifeMD reported its first-quarter results, it was overly optimistic about its future revenue and EBITDA, citing a strong market position through its RexMD brand and a supposed 'competitive moat' in virtual obesity care. However, these claims are said to have concealed substantial operational issues facing the company.
Key allegations include rising customer acquisition costs significantly affecting the RexMD segment and a higher-than-expected refund rate associated with its weight management services. These challenges were not disclosed to investors, masking the underlying troubles the company was experiencing.
The narrative took a turn on August 5, 2025, when LifeMD released its second-quarter results. The numbers fell short of expansion expectations, leading to a downward adjustment of the company's full-year guidance. During this earnings call, management pointed to "temporary elevated customer acquisition costs" and refund complications as primary factors for the disappointing performance. This announcement resulted in LifeMD's stock plummeting by over 44%, prompting investors who faced notable losses to consider legal recourse.
The legal firm Hagens Berman, known for its focus on corporate accountability, is leading the investigation into these claims. Reed Kathrein, a partner at the firm, stated, "We are looking into whether LifeMD was aware of crucial operational issues yet failed to inform its investors."
For investors who have experienced financial losses during the specified period, participation in this class action lawsuit could present a path to recover damages incurred due to perceived fraud. The deadline for investors to assert their claims in this case is October 27, 2025.
Additionally, whistleblower opportunities may be available for individuals with confidential information related to LifeMD's operations. Those who provide original insights that benefit the ongoing investigation can potentially benefit from the SEC Whistleblower program, which offers rewards totaling up to 30 percent of any successful recovery achieved by the SEC.
LifeMD's situation highlights the importance of transparency and honesty in corporate communications, especially within the fast-evolving healthcare and telehealth sectors. As more details unfold in this case, investors and industry observers will be watching closely to ensure that accountability is upheld and that justice is served for those affected by these troubling allegations.
Topics Health）
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