Deadline Looms for Treace Medical Investors Amid Fraud Allegations

Treace Medical Concepts, Inc. (TMCI) investors who suffered losses after the company’s stock cratered in May 2024 now face a critical deadline to seek compensation. A securities fraud lawsuit alleges the company misled investors about its flagship product’s market viability, competitive risks, and financial health—culminating in a devastating 62.5% stock plunge. With just over 13 months remaining until June 10, 2025, those holding TMCI shares during the May 8, 2023, to May 7, 2024, period must act swiftly to preserve their rights.

At the heart of the dispute is the Lapiplasty 3D Bunion Correction System, a product once hailed as a growth driver for the company.

. The lawsuit claims Treace Medical failed to disclose mounting competition from cheaper knockoff devices and increased adoption of alternative surgical techniques, such as minimally invasive osteotomy (MIS) procedures. These challenges allegedly eroded demand for Lapiplasty, forcing the company to slash its 2024 revenue guidance by $20 million—a revelation that triggered the stock’s collapse on May 8, 2024.

The complaint further accuses management of making “materially false or misleading statements” about its financial stability. For instance, executives had repeatedly emphasized the product’s “strong demand” and “long runway for growth” during the Class Period, even as internal data allegedly revealed deteriorating market share and rising costs to develop alternatives. The sudden $20 million guidance cut, announced after markets closed on May 7, exposed these missteps, causing TMCI’s shares to plummet from $11.12 to $4.17—the lowest level in years.

A chart would show TMCI’s stock hovering near $10 throughout 2023, with a sharp decline in early 2024. The May 8, 2024, drop to $4.17 marks the nadir, underscoring the severity of the financial blow to investors.

The legal stakes are high. Investors who purchased TMCI shares during the Class Period can join the class-action lawsuit without immediate action, but those seeking lead plaintiff status must file by June 10, 2025. The Law Offices of Howard G. Smith, leading the case, emphasizes that the deadline is non-negotiable. “This isn’t just about compensation—it’s about accountability,” said a firm spokesperson. “Investors deserve to know whether Treace Medical’s optimistic claims were grounded in reality or wishful thinking.”

The lawsuit’s outcome could hinge on whether Treace Medical’s leadership had a “reasonable basis” for its positive statements. If the court rules in plaintiffs’ favor, damages could extend to the full extent of investors’ losses—estimated at roughly $100 million based on TMCI’s market cap decline. However, even if successful, the process could take years, as securities fraud cases often involve lengthy discovery phases and potential appeals.

For now, the key takeaway is clear: investors must act. Those holding TMCI shares during the Class Period should consult the Law Offices of Howard G. Smith by June 10, 2025, to secure their position. The firm’s contact details—phone, email, and address—are provided in the complaint, though the legal process requires no upfront fees.

In conclusion, this case underscores the risks of relying on corporate optimism in the face of competitive threats. TMCI’s stock price freefall—a 62.5% single-day drop—speaks volumes about the consequences of delayed transparency. As the deadline approaches, investors must weigh the potential for recovery against the long odds of litigation. But with millions at stake, the choice to act—or not—could define their financial futures.