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A class action lawsuit has been filed against Semler Scientific (SMLR), with shareholders claiming they purchased stock at artificially inflated prices between March 10, 2021, and April 15, 2025. The lawsuit, filed on August 29, 2025, seeks compensation for financial losses experienced by investors who bought shares during this period.
Semler Scientific, a medical technology company that develops solutions for early detection of chronic diseases, has come under legal scrutiny for allegedly failing to disclose a material investigation by the U.S. Department of Justice (DOJ) into violations of the False Claims Act. The company’s flagship product, QuantaFlo, is FDA-approved for measuring arterial blood flow in extremities.
The False Claims Act is designed to protect federal programs, including Medicare, from fraud and misuse. The legislation encourages whistleblowers to report fraudulent activities through a system of financial rewards and legal protections.
According to court documents, Semler Scientific and three current or former senior officers repeatedly made false and misleading statements throughout the class period by omitting information about the DOJ investigation from SEC filings and other material disclosures.
The complaint highlights that at the beginning of the class period, Semler Scientific acknowledged in general terms that the federal government was investigating healthcare providers for improper Medicare billing, noting that such investigations had resulted in substantial financial settlements. The company also stated that the DOJ was monitoring healthcare companies’ interactions with providers to ensure compliance with federal laws.
While Semler Scientific warned investors that potential violations of fraud or abuse laws could lead to serious penalties, the plaintiffs allege that the company failed to disclose that it was already under investigation and had begun settlement discussions with the DOJ.
The true nature of the situation began to emerge on February 28, 2025, when Semler Scientific first publicly acknowledged the investigation after market close. This revelation caused the company’s stock to fall 9.4% when trading resumed.
The situation worsened on April 15, 2025, when Semler Scientific filed a current report with the SEC providing further details. The report disclosed that the company had engaged in initial settlement discussions with the DOJ on February 11, 2025, regarding a civil investigative demand. After temporarily pausing these talks, Semler Scientific eventually agreed in principle to a $29.75 million settlement to resolve all claims, not including potential legal fees for the whistleblower’s attorneys.
Following this announcement, SMLR stock plunged nearly 10% the next trading day, continuing a downward trajectory that has seen the stock lose more than 57% of its value year-to-date.
This case underscores the serious consequences that can result when public companies fail to disclose material information to investors. The DOJ’s focus on healthcare fraud has intensified in recent years, with investigations increasingly targeting not just providers but also the companies that supply them with products and services.
For Semler Scientific, the $29.75 million settlement represents a significant financial blow, especially for a company in the medical technology sector where profit margins can be squeezed by regulatory compliance costs and reimbursement challenges.
The case also highlights the effectiveness of whistleblower provisions in uncovering potential fraud. While details about the whistleblower have not been disclosed, the mention of legal fees for the whistleblower’s attorneys indicates that an insider likely played a role in bringing the allegations to light.
As this legal action progresses, investors and industry observers will be watching closely to see whether Semler Scientific can rebuild trust with shareholders and what operational changes might be implemented to prevent similar issues in the future.
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10 Comments
Medicare fraud is a major concern, so it’s not surprising the DOJ is investigating Semler’s billing practices for their QuantaFlo device. Shareholders deserve transparency about any potential legal issues, even if the outcome is still uncertain.
The class action lawsuit seems justified if Semler truly concealed this DOJ probe from shareholders. Investors have a right to know about any major legal issues or regulatory investigations that could impact the company’s finances and operations.
Agreed. Failure to disclose such material information is a serious breach of fiduciary duty. The plaintiffs will likely have a strong case if the allegations hold true.
This is a complex case that highlights the importance of robust compliance and disclosure practices, especially for medical technology companies relying on government healthcare programs. I’ll be following this story closely to see how it unfolds.
Absolutely. Proper disclosure of regulatory investigations is critical for publicly traded firms. Investors need to be able to make informed decisions, not be blindsided by hidden legal issues.
The class action lawsuit alleges that Semler misled investors by failing to disclose the DOJ’s False Claims Act probe. If true, this would be a serious breach of securities laws and fiduciary duties.
This is a cautionary tale about the importance of transparency and accurate disclosures, especially for companies that rely on government healthcare programs. I’m curious to see how Semler responds to the class action lawsuit.
This is a concerning development for Semler Scientific investors. It appears the company failed to disclose a material DOJ investigation into potential False Claims Act violations related to their medical device QuantaFlo. Transparency and accountability are crucial for public companies.
Semler’s QuantaFlo device is used to measure blood flow, so any issues with its Medicare billing could have significant financial implications for the company. Shareholders will be watching this case closely.
Absolutely. Allegations of Medicare fraud are very concerning, especially for a medical device company. Proper disclosure of regulatory investigations is paramount for public companies.