Investors Alerted to Zynex Class Action Lawsuit Amidst Bankruptcy and Fraud Allegations

Update on Zynex Shareholders: Class Action Lawsuit Filed

The law firm Hagens Berman, known for its focus on shareholder rights, has initiated a securities class action lawsuit against Zynex, Inc. (NYSE: ZYXI, OTC: ZYXIQ) following alarming revelations of the company's financial misconduct. This lawsuit comes amidst Zynex's recent bankruptcy filing and delisting from the Nasdaq, significant events that have sent shockwaves through the investor community.

Background of the Case

On March 26, 2026, Hagens Berman announced the filing of the lawsuit in the U.S. District Court for the District of Colorado. The suit seeks to represent all individuals or entities who acquired Zynex securities during the defined class period, which spans from February 25, 2021, to December 15, 2025. The allegations suggest that Zynex misrepresented its financial health, primarily through a systematic overbilling scheme directed at government payors.

Reed Kathrein, the partner leading the investigation, expressed grave concerns regarding the nature of Zynex's business practices. According to the allegations, the company's reported revenue growth was fabricated by engaging in a predatory scheme that involved abundantly supplying patients with medical products—far beyond what was necessary—all to inflate billing amounts paid by insurers.

Allegations of Fraud

Systemic Overbilling

The complaint outlines a troubling operation where Zynex allegedly provided excessive amounts of medical supplies, such as 128 electrode pairs per month to patients who didn’t need them. This alleged misconduct not only violates ethical standards but also federal securities laws. The firm suggested that Zynex lacked the internal controls necessary to prevent such unauthorized actions.

Payment Suspensions

In early 2025, Zynex’s primary payor, Tricare, halted all payments due to the revelations surrounding the company’s practices. According to reports, Zynex's management failed to fully disclose the implications of this suspension until it became critical, resulting in an obligation for the company to forfeit over $85 million to settle fraud claims against it.

Legal Actions Against Executives

The situation escalated when, on January 21, 2026, former CEO Thomas Sandgaard and former COO Anna Lucsok were indicted on counts of healthcare and securities fraud, which led to their departure from the company. These indictments exemplify the dire state of Zynex and highlight the gravity of the circumstances surrounding its corporate governance.

Consequences for Investors

The fallout from these allegations has been severe, culminating in Zynex's Chapter 11 bankruptcy filing. This move has essentially obliterated the value for common equity holders, with little recourse available for many investors who have seen significant losses.

Critical Deadlines

For those who purchased Zynex stock during the aforementioned class period, a key deadline looms. Investors have until April 21, 2026, to submit a request to be appointed as Lead Plaintiff in the ongoing litigation. Participating in this way may provide the best chance for recovering losses incurred as a result of the alleged fraud.

How to Take Action

Investors who believe they qualify to be a part of the class action are encouraged to visit Hagens Berman’s dedicated site to file claims concerning their losses. The firm has emphasized the importance of acting promptly given the rigid deadline and the urgency of the undertaking.

For individuals possessing non-public information about Zynex's operations, there is also an option to disclose such information as a whistleblower. Those who do may be eligible for rewards up to 30% of any recovery sourced from the SEC.

Conclusion

Hagens Berman has established itself as a formidable advocate in the realm of protecting investor rights. With more than $2.9 billion in recoveries to date, the firm encourages all affected Zynex investors to come forward and consider their options during this critical juncture. As this class action unfolds, the spotlight on corporate accountability and investor protection remains paramount.