Fraud Investigations and Falling Stocks: Why Investors Need to Beware of Tempus AI and 3D Systems

The market is a brutal judge of truth, and right now, two companies—Tempus AI (TEM) and 3D Systems (DDD)—are on trial. Recent investigations triggered by reports from Spruce Point Capital and botched financial disclosures have sent their stocks into a tailspin. This isn't just about bad news; it's about the systemic risks investors face when companies blur the line between ambition and fraud. Let's dissect what's at stake here and why you should think twice before touching these stocks.

Tempus AI (TEM): The Spruce Point Bombshell

Tempus AI, once a darling of the AI healthcare space, is now under fire after Spruce Point Capital's May 28 report exposed accounting irregularities, questionable partnerships, and ties to executives with a history of financial missteps. The report alleged that Tempus inflated contract values, engaged in “round-tripping” revenue with SoftBank, and used aggressive billing practices in its Ambry Genetics acquisition. The fallout? A 19.2% stock plunge in one day.

But the damage doesn't stop there. Class action lawsuits are now brewing, targeting investors who bought shares between August 2024 and May 2025. The clock is ticking: the deadline to join as a lead plaintiff is August 12, 2025.

Why This Matters:
- Operational Weaknesses: The company's partnership with AstraZeneca looks shaky, with revenue commitments diluted via a “pass-through” deal with Pathos AI.
- Leadership Red Flags: Executives linked to past financial restatements are now steering a company with a $1.3 billion market cap.
- Legal Costs: Defending these lawsuits will drain resources, distracting from core business goals.

Investment Takeaway:
Avoid TEM like the plague until this legal cloud lifts. The stock is a trap for the unwary. If you're in, sell now—don't wait for the next shoe to drop.

3D Systems (DDD): A Perfect Storm of Mismanagement

3D Systems, a pioneer in 3D printing, has been gutted by its own failures. Starting with its March 26 Q4 2024 report, which missed earnings estimates and revealed a $9 million revenue cut in its Regenerative Medicine program, the stock plummeted 21%. Then came the May 12 Q1 2025 results: inventory management meltdowns in its dental division, withdrawn full-year guidance, and another 26.6% drop to $1.87.

The lawsuits here are just as damning. Firms like Rosen Law and Wolf Haldenstein are alleging that 3D Systems hid the truth about weak customer demand and overhyped its ability to weather economic headwinds. The August 12 deadline applies here too.

Why This Matters:
- Structural Issues: The company's core healthcare business is struggling with inventory and demand problems.
- Regulatory Risks: Changes to accounting estimates for its Regenerative Medicine program raise questions about transparency.
- Valuation Collapse: At $1.87, DDD is flirting with penny-stock territory. A settlement or adverse ruling could push it lower.

Investment Takeaway:
DDD is a write-off unless you're a short-seller. The stock is trading at levels that already price in some pain, but with legal battles unresolved, it's not out of the woods yet. Stay on the sidelines.

The Bigger Picture: Why Investors Must Act Now

Both companies are textbook examples of how legal risks and operational flaws can obliterate value. Here's what every investor should do:
1. Avoid New Positions: Neither stock offers a “bottom” yet. Wait until lawsuits settle or operational clarity emerges.
2. Consider Shorting: For aggressive traders, betting against these names could pay off—if you have a high risk tolerance.
3. Consult Legal Counsel: If you held shares during the Class Period, don't miss the August 12 deadline to join lawsuits.

Remember: In markets, trust but verify. When reports like Spruce Point's surface, or financial results miss badly, it's not just a blip—it's a warning. These companies are in survival mode. Don't let your portfolio become their lifeboat.

Final Word: Run for the hills on TEM and DDD. This isn't a time to be patient—it's a time to protect your capital.

Data as of June 19, 2025. Past performance does not guarantee future results. Always consult a financial advisor before making investment decisions.