Securities Class Action Lawsuit Against Semler Scientific Moves Forward as October Deadline Approaches

Investors who suffered losses in Semler Scientific, Inc. (NASDAQ: SMLR) have until October 28, 2025, to join a federal securities class action lawsuit alleging the company misled shareholders about a Department of Justice investigation, according to law firm Faruqi & Faruqi, LLP.

The lawsuit, which covers investors who held Semler Scientific shares between March 10, 2021, and April 15, 2025, claims the medical technology company and its executives violated federal securities laws by failing to disclose a material DOJ investigation into potential violations of the False Claims Act.

According to court documents, Semler Scientific discussed possible False Claims Act violations only in hypothetical terms while allegedly concealing an actual ongoing federal investigation into the company’s practices. The complaint argues this omission rendered the company’s public statements “materially false and/or misleading.”

The investigation became public on February 28, 2025, when Semler Scientific filed its annual report with the Securities and Exchange Commission. The filing revealed that the company had engaged in “initial settlement discussions with DOJ” on February 11, 2025, before those talks were discontinued the same day.

In the filing, Semler Scientific acknowledged “there is a risk that DOJ will file a complaint or complaint in intervention in a civil False Claims Act lawsuit seeking damages,” though the company stated it “does not believe the amount of loss can be reasonably estimated.”

Market reaction was swift, with Semler Scientific’s stock price dropping more than 9% during the next trading session as investors processed the implications of potential federal litigation.

The False Claims Act is a powerful federal statute that imposes liability on individuals and companies who defraud governmental programs. In healthcare, these cases often involve allegations of improper billing practices, kickbacks, or misrepresentations to Medicare, Medicaid, or other federal healthcare programs. Penalties can be severe, including treble damages and substantial per-claim fines.

Semler Scientific specializes in developing, manufacturing, and marketing products that assist healthcare providers in the diagnosis and treatment of peripheral arterial disease and other chronic diseases. The company’s flagship product, QuantaFlo, is a four-minute in-office blood flow test designed to help identify patients at risk for peripheral arterial disease.

The lawsuit comes amid increased regulatory scrutiny across the healthcare technology sector, where government agencies have stepped up enforcement actions against companies alleged to have engaged in fraudulent practices. For medical device manufacturers like Semler Scientific, compliance with healthcare regulations has become increasingly complex as reimbursement models evolve and enforcement priorities shift.

Faruqi & Faruqi, which specializes in securities litigation, is seeking a lead plaintiff to direct the case. The lead plaintiff, typically the investor with the largest financial interest in the outcome, will represent the proposed class of shareholders who purchased Semler Scientific stock during the specified period.

James (Josh) Wilson, a partner at Faruqi & Faruqi, is encouraging affected investors to contact the firm to discuss their legal options. The law firm noted it has previously recovered “hundreds of millions of dollars for investors” since its founding in 1995.

The case underscores the critical importance of corporate transparency regarding regulatory investigations. For investors in healthcare and medical technology companies, where regulatory compliance is fundamental to business operations, such disclosures can significantly impact investment decisions and stock valuations.

As the October 28 deadline approaches, affected Semler Scientific investors must decide whether to actively participate in the litigation or remain passive class members. The court’s appointment of a lead plaintiff will be a critical next step in determining how the case proceeds.