Zynex, Inc. Faces Class Action Lawsuit: Investors Beware of Impending Deadline and Regulatory Risks

The medical device manufacturer Zynex, Inc. (NASDAQ: ZYXI) is under fire following a class action lawsuit alleging securities fraud and regulatory misconduct. Investors who purchased shares between March 13, 2023, and March 11, 2025, now face a critical deadline to seek compensation. The lawsuit, led by Levi & Korsinsky LLP, accuses Zynex of inflating revenue through excessive product shipments and concealing risks tied to fraudulent billing practices.

Key Allegations and Timeline

The lawsuit centers on two primary claims:
1. Revenue Manipulation via Excessive Shipments: Zynex is accused of sending products like electrodes and batteries in quantities exceeding market demand, artificially inflating revenue. This practice was allegedly used to mislead investors about the company’s financial health.
2. Fraudulent Billing and Regulatory Scrutiny: The complaint highlights Zynex’s submission of false claims to insurers, including the U.S. military health program Tricare. In 2024, Tricare began investigating these practices, eventually suspending payments pending review.

The market reacted sharply to these revelations:
- A 5% stock drop occurred in June 2024 following a STAT investigation exposing Zynex’s “oversupplying scheme.”
- On March 11, 2025, Zynex announced a revenue shortfall and Tricare’s payment suspension, triggering a 51% single-day stock collapse.

Legal Proceedings and Investor Deadlines

The case, Tuncel v. Zynex, Inc., is pending in the U.S. District Court for the District of Colorado. Shareholders who suffered losses during the class period have until May 19, 2025, to file to become lead plaintiff. While lead plaintiff status requires demonstrating the largest financial interest in the case, all class members are eligible for compensation without upfront costs.

Multiple law firms are representing investors, including The Gross Law Firm, Berger Montague PC, and Robbins Geller Rudman & Dowd LLP. Robbins Geller, noted for its 2024 $2.5 billion securities recovery, underscores the case’s potential scale.

Why This Matters to Investors

The allegations highlight systemic risks for Zynex:
- Regulatory Penalties: Tricare’s investigation could lead to exclusion from insurance networks, a devastating blow for a company reliant on insurer reimbursements.
- Reputational Damage: The STAT report and subsequent lawsuits have already eroded investor confidence, as evidenced by the stock’s 51% plunge.
- Class Action Precedent: Similar cases, such as Insys Therapeutics’ 2019 opioid fraud settlement ($225 million), show that companies facing such allegations often face significant financial repercussions.

Investor Actions and Considerations

1. Register by May 19: Even if you don’t seek lead plaintiff status, registration ensures eligibility for any settlement. Use the firm’s submission form at
   https://zlk.com/pslra-1/zynex-inc-lawsuit-submission-form.
2. Monitor Legal Updates: Zynex’s case may face motions to dismiss or settlements. Investors should track court filings and press releases.
3. Assess Portfolio Exposure: For holders of ZYXI stock, consider the long-term risks of regulatory penalties and declining investor trust.

Conclusion: A Cautionary Tale for Healthcare Investors

Zynex’s situation exemplifies the risks of revenue manipulation and regulatory noncompliance in the healthcare sector. With a 51% stock decline already documented and the threat of multi-million-dollar penalties, the company’s future hinges on how it navigates this litigation.

Investors must act swiftly: the May 19 deadline is non-negotiable for lead plaintiff consideration. Even passive shareholders should register to ensure recovery eligibility. Meanwhile, the market’s reaction—evident in ZYXI’s plummet—underscores the importance of diligence in evaluating a company’s financial transparency and regulatory compliance.

In an era where healthcare fraud lawsuits are increasingly common, Zynex’s case serves as a stark reminder: transparency is not just ethical—it’s essential for long-term shareholder value.

Data as of April 2025. Past performance does not guarantee future results.