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GeneDx investigated for securities law violations, allegedly fraudulent practices.
ByAinvest
Thursday, Jul 31, 2025 3:31 am ET1min read
• GeneDx Holdings Corp. investigated for securities law violations. • Grizzly Research report claims company committed fraud and inflated earnings. • Report alleges "code stacking" to bill for services not provided. • Investigation focuses on material information disclosure. • Former employees testify to unlawful practices.
GeneDx Holdings Corp. (NASDAQ: WGS) is currently under investigation by legal firms for potential securities law violations. The DJS Law Group and the Portnoy Law Firm have both initiated investigations into claims that the company made false or misleading statements or failed to disclose material information to investors. The investigations center on whether GeneDx engaged in fraudulent schemes and manipulated Medicaid and Medicare programs to artificially boost revenue.On February 5, 2025, Grizzly Research released a report titled "Insiders Attest That GeneDx (Nasdaq: WGS) Is Actively Committing Widespread Fraud." The report alleges that GeneDx's reported growth is largely an illusion, driven by fraudulent schemes and illegal tactics. It further claims that the company inflated earnings through the unlawful practice of "code stacking," which allows billing for services that fail to meet the appropriate standards. The report also suggests that CEO Katherine Stueland and CFO Kevin Feeley have routinely sold their shares upon vesting without participating in open market acquisitions, indicating insider awareness of potential threats to the business.
Following the Grizzly Research report, GeneDx's stock price experienced a decline of 6.7% on February 5, 2025, as investors reacted to the serious allegations. The DJS Law Group and the Portnoy Law Firm are both advising investors to contact their respective firms to discuss their legal rights and potential options for recovering losses.
The investigations are significant for investors, as they highlight potential risks associated with the company's financial reporting and business practices. Investors are encouraged to stay informed and consult with legal professionals to understand their rights and options.
References:
[1] https://www.morningstar.com/news/pr-newswire/20250728la38401/wgs-investors-have-opportunity-to-join-genedx-holdings-corp-investigation-with-the-djs-law-group
[2] https://www.globenewswire.com/news-release/2025/07/30/3124544/0/en/GeneDx-Holdings-Corp-Investors-Company-Investigated-by-the-Portnoy-Law-Firm.html
[3] https://www.morningstar.com/news/globe-newswire/9503468/genedx-holdings-corp-investors-company-investigated-by-the-portnoy-law-firm
[4] https://www.barchart.com/story/news/33687137/wgs-investors-have-opportunity-to-join-genedx-holdings-corp-investigation-with-the-djs-law-group
[5] https://in.investing.com/news/analyst-ratings/genedx-stock-price-target-raised-to-125-from-100-at-btig-on-strong-q2-93CH-4933948
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