#United States #New York #Securities Fraud #Hagens Berman #LifeMD

LifeMD Faces Legal Challenges in Alleged Fraud Case

A significant legal battle has emerged as LifeMD, the telehealth company known for its innovative health services, is now under scrutiny in a federal securities fraud class action lawsuit. Filed in the Eastern District of New York, the lawsuit alleges that LifeMD, along with its executives, provided a misleading overview of its financial status and growth potential to investors. As circumstances unfolded, the lawsuit was prompted by a considerable drop in the company's stock value following an earnings report that the market reacted to negatively.

Background of the Lawsuit

The lawsuit, named Johnston v. LifeMD, Inc., pertains to the period between May 7 and August 5, 2025. On May 6, 2025, LifeMD released its first-quarter financial results, encouragingly raising its overall revenue and adjusted EBITDA forecasts. However, the complaint suggests that this optimistic reporting was deceptive as it failed to adequately disclose operational difficulties that could impede the company’s growth.

Key issues highlighted in the lawsuit include rising customer acquisition costs for the company's RexMD division, as well as a troubling increase in refund rates pertinent to their weight management services. These concerns, according to the plaintiffs, were essential pieces of information that LifeMD neglected to disclose to its investors, which significantly undermined their financial assessments when investing in the company’s stock.

The Fallout from Misleading Claims

The alleged misleading statements became increasingly apparent on August 5, 2025, when LifeMD's fortunes took a turn for the worse. The company reported its second-quarter earnings, which fell short of analysts' revenue and earnings per share estimates. During the earnings call following this report, LifeMD management cited