Investors sue Hims & Hers after FTC lawsuit plummets stock price

Filed 1h ago · Via Courthouse News · The Buffoon Desk

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Bushwick Tarantella

Kevin MacLeod · incompetech.com · CC BY 4.0

Photo: Jacklee · CC BY-SA 3.0 · via Wikimedia Commons

A class-action lawsuit filed by lead plaintiff Hemalatha Velanki accuses telehealth company Hims & Hers of making misleading statements about its business practices that inflated its stock price before a Federal Trade Commission lawsuit sent shares down nearly 15% in a single trading day. The FTC's July suit alleged the company shared consumer health data with Meta and Snap and used deceptive advertising, including charging customers before they'd actually consulted a provider.

The investor suit claims Hims & Hers' quarterly SEC filings repeatedly asserted the company maintained safeguards to protect health information while only vaguely warning that data-related risks 'could' or 'may' hurt the business. A May filing finally disclosed that the FTC had been investigating since 2023 and that settlement talks were underway.

Hims & Hers has denied wrongdoing, calling the FTC action headline-seeking rather than genuine enforcement, and says it will vigorously fight the follow-on securities claims. CEO Andrew Dudum and CFO Oluyemi Okupe are named as defendants alongside the company.

The full dispatch is available from the source below.

✒ FROM THE EDITORIAL DESK

Telling investors for two years that your safeguards are solid while quietly sitting on a federal investigation into whether they are, in fact, not solid, is the kind of gap between messaging and reality that shareholders tend to notice eventually — usually right after the stock drops 15%.

Source: Read the original at Courthouse News → Scored: Bushwick Tarantella · Kevin MacLeod · CC BY 4.0

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