Zynex, Inc. (ZYXI) Securities Class Action

The litigation alleges that Zynex misled investors for years by reporting “record growth” that was allegedly fueled by a fraudulent scheme to ship medically unnecessary supplies, such as excessive electrode pairs, to unsuspecting patients. This practice, often referred to as an “oversupplying scheme,” eventually led to a massive $85 million forfeiture to the Tricare military health program and criminal charges against the company’s former leadership.

Zynex investors are encouraged to visit the Hagens Berman Zynex case page to download a copy of the complaint and review the lead plaintiff process: www.hbsslaw.com/cases/zynex

Summary of Allegations: The “Oversupplying” Scheme

The filed complaint alleges that Zynex’s executives violated federal securities laws.

• Systemic Overbilling: The lawsuit alleges Zynex routinely shipped patients up to 128 electrode pairs per month, far exceeding medical necessity, specifically to inflate billings to government and private payors.
• Tricare Suspension & Forfeiture: In March 2025, Zynex revealed that Tricare—representing 25% of its revenue—had suspended payments. It was later revealed that Zynex agreed to forfeit over $85 million in billings to resolve these fraud allegations.
• Criminal Indictments: On January 21, 2026, former CEO Thomas Sandgaard and former COO Anna Lucsok were indicted for health care and securities fraud, leading to their immediate removal from the company.
• Chapter 11 & Delisting: As the fraud came to light, Zynex was forced to file for bankruptcy and was subsequently delisted from the Nasdaq, with its stock price (now ZYXIQ) suffering a near-total loss of value for common equity holders.

FREQUENTLY ASKED QUESTIONS ABOUT THE CASE

What is the ZYXI investigation about?

We are investigating whether Zynex’s revenue was not organic growth, but rather the result of predatory billing practices that management continued even after being warned by major insurers.

WHAT SHOULD I DO?

I worked at ZYXI. What should I do?

If you were an employee of ZYXI, you may have valuable information that could be relevant to the investigation. Hagens Berman is one of the nation’s top whistleblower law firms, and has successfully represented many individuals who come forward with information regarding corporate malfeasance. Under the new SEC Whistleblower program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, contact Reed Kathrein at 844-916-0895 or [email protected].

There are multiple law firms participating, do I need to contact all of them?

No, you do not need to contact all participating law firms. Generally, class-action investigations and lawsuits are consolidated into a single case to streamline the legal process, and attorneys from only a few law firms are selected to serve in a leadership role on the consolidated case. Hagens Berman has a proven track record of being appointed to leadership roles in complex, multidistrict litigation regarding investor fraud and other consumer rights issues, and your claim will be handled by attorneys who have helped secure approximately $325 billion in class-action settlements on behalf of individuals who have suffered due to corporate malfeasance and the wrongdoing of other powerful institutions.

AM I ELIGIBLE?

What is the threshold amount to be eligible? What are “substantial” losses?

The threshold amount and the definition of "substantial" losses may vary depending on a number of factors specific to the case, including the size of the company, market cap, shares outstanding and who holds them and the damages alleged by the fraud. In general, to be eligible to participate in a class-action lawsuit, you must be able to demonstrate that you suffered financial losses as a result of the alleged wrongdoing and that your losses meet the criteria set by the court or law firm. Fill out the form and submit your losses.

CAN I PARTICIPATE?

Am I affected? What do I need to do to participate?

If you were an investor in ZYXI, you may be affected and eligible to participate in the case. To determine your eligibility and potential involvement, fill out the form and submit your losses.

Can any ZYXI investor participate?

In most class-action investigations and cases, any investor who meets the eligibility criteria, including purchasing the shares during the relevant period, can participate, regardless of the size of their investment. Fill out the form to find out your rights.

I bought on a non-U.S. Exchange. Can I participate?

No. This investigation only covers shares bought on a U.S. exchange, i.e. NASDAQ or NYSE. Fill out the form to find out your rights.

Am I included if I still hold my shares, or do I need to sell to participate?

Participation is based on purchasing shares during the relevant period, rather than your current holdings. Accordingly, you do not need to sell to participate. Fill out the form to find out your rights.