iRhythm Technologies, Inc.

  • Dismissed

Investigation
12/02/2020

Initial Lawsuit
02/01/2021

Lawsuit Progression
06/01/2021

Dismissal
03/31/2022

Investigation

  • Continous Holding
    August 4, 2020 to January 28, 2021
  • Proposed Claim
    Securities Violation

Investigation regarding iRhythm’s statements about its Zio service revenue from the U.S. Centers for Medicare and Medicaid Services (“CMS”) and the impact of its new fee schedule proposed rule.

Main Event

Confirmation

12/02/2020

SEC Filing

iRhythm responds to the Centers for Medicare and Medicaid Services (CMS) issues its final policy for payment and quality provisions changes to the Medicare physician fee schedule for 2021. The company confirms that CMS did not finalize national pricing for certain patch and electrocardiogram products (included in the Zio service).

The stock impact compares the closing price immediately preceding the date of the event and the following closing price. The price difference also reflects the overall mix of information.

Stock Impact

Close Previous close Price variation Percentage variation
$192.21 $240.64 $-48.43 -20.13%
See more on Factual Timeline

Initial Lawsuit

First Complaint - 02/01/2021

Plaintiff brings this securities class action on behalf of all investors who purchased or otherwise acquired iRhythm Technologies, Inc. common stock between August 4, 2020 and January 28, 2021, inclusive.

  • Filing Date
    02/01/2021
  • Class Period
    08/04/2020 to 01/28/2021
  • Transgression
    Securities Violation
  • Filing Firms
    Block & Leviton, LLP
  • Case Title
    Habelt v. iRhythm Technologies, Inc.
  • Docket Number
    3:21-cv-00776
  • Court
    California Northern District Court
  • Free File
    Complaint

Allegations

According to the complaint, defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the company’s business, operations, and prospects. Specifically, defendants allegedly failed to disclose to investors that:

(1) iRhythm’s business would suffer as a result of the CMS’ rulemaking;
(2) reimbursement rates would in fact plummet;
(3) a lack of national pricing in the CMS rule and fee schedule would cause uncertainty and weakness in the Company’s business; and
(4) as a result of the foregoing, Defendants’ public statements were materially false and misleading at all relevant times.

Defendants

  • Company
    iRhythm Technologies, Inc.
  • Chief Executive Officer
    Kevin M. King

Lawsuit progression

  • Docket Number
    3:21-cv-00776
  • Court
    California Northern District Court

Lead Counsel

06/01/2021

The court issued an order appointing the lead plaintiff and lead counsel.

Second Amended Complaint

09/24/2021

This is a federal securities class action on behalf of a class consisting of all persons who purchased or otherwise acquired iRhythm’s common stock between August 4, 2020 and July 13, 2021, both dates inclusive.

Motion to Dismiss

10/27/2021

A motion to dismiss was filed with the court.

03/31/2022

Court Granted the motion to dismiss.

Dismissal

On 03/31/2022, the court dismissed the complaint with prejudice.

Why was the case dismissed?

Following defendants’ motion to dismiss plaintiffs’ second amended complaint in its entirety for failure to state claims, pursuant to Fed. R. Civ. P. 12(b)(6)., the court granted defendants’ motion.

Because Plaintiff’s theory of fraud lacks support in facts and law, further amendment would be futile. Thus, the complaint is dismissed with prejudice.

Free File
Order on Motion to Dismiss

[stockdio-historical-chart symbol=”IRTC” stockExchange=”NYSENasdaq” width=”500″ height=”330″ motif=”blinds” palette=”humanity” includeVolume=false]

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