Zynex Faces Class Action Lawsuit Over Fraud Allegations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 days ago
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Source: Globenewswire
- Lawsuit Background: Hagens Berman has filed a class action lawsuit against Zynex, Inc. and its former executives, alleging that a massive overbilling scheme led to the company's delisting and Chapter 11 bankruptcy, severely impacting investor interests.
- Overbilling Allegations: The complaint claims that from 2021 to 2025, Zynex shipped excessive medical supplies to patients, with some receiving up to 128 electrode pairs per month, intentionally inflating billings and violating federal securities laws due to a lack of effective internal controls.
- Payment Suspension Impact: In 2025, Zynex's largest payor, Tricare, suspended all payments, and management concealed the severity of this situation, ultimately forcing the company to forfeit over $85 million to resolve fraud allegations, resulting in near-total losses for shareholders.
- Executives Indicted: Former CEO Thomas Sandgaard and former COO Anna Lucsok were indicted for healthcare and securities fraud in January 2026, leading to their immediate removal, which further exacerbated the company's crisis.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
