NEW YORK–(BUSINESS WIRE)–Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, announces that a class action lawsuit has been filed in the United States District Court for the Southern District of New York on behalf of investors that purchased LifeMD, Inc. (NASDAQ: LFMD) securities between January 19, 2021 and April 13, 2021, inclusive (the “Class Period”). Investors have until June 15, 2021 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
Click here to participate in the action.
LifeMD is a direct-to-patient telehealth company. It offers a telemedicine platform that purports to help patients access licensed providers for diagnoses, virtual care, and prescription medications.
On April 14, 2021, Culper Research issued a report alleging that “LifeMD appears to use unlicensed doctors to dispense OTC medications, has implemented an auto shipping/auto billing scheme, failed to honor guarantees, and put in place abusive telemarketing practices.” The report also alleged that several of the Company’s executives were involved in “wide ranging fraud” at Redwood Scientific, which was charged by the U.S. Federal Trade Commission for “unlawful auto shipping, abusive telemarketing, and false claims.” Specifically, according to Culper Research, “many customers are effectively duped into purchasing subscriptions rather than one-time purchases” and LifeMD “makes cancellations difficult if not impossible.”
On this news, the Company’s share price fell $2.84, or 24%, to close at $9.00 per share on April 14, 2021.
The complaint, filed on April 16, 2021, alleges that throughout the Class Period defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, defendants failed to disclose to investors: (1) that many of LifeMD’s executives were associated with Redwood Scientific when it was charged for unlawful auto shipping, abusive telemarketing, and false claims, and that they employed similar practices at the Company; (2) that LifeMD engaged in auto shipping products to unwilling customers to record recurring revenue and the Company made it difficult to cancel such subscriptions; (3) that certain of the purportedly licensed physicians on the Company’s platform were not in fact licensed and faced disciplinary action; (4) that, as a result of the foregoing practices, the Company was reasonably likely to face regulatory scrutiny and/or reputational harm; and (5) that, as a result of the foregoing, defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
If you purchased LifeMD securities during the Class Period and suffered a loss, are a long term stockholder, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker, Melissa Fortunato, or Marion Passmore by email at firstname.lastname@example.org, telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
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Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.