On July 21, 2025, a U.S. District Court for the District of Connecticut ruled that a securities fraud lawsuit against GeneDx Holdings Corp., its CEO, and former company executives could move forward. The lawsuit alleges that between January 2022 and August 2022, GeneDx, then named Sema4 Holdings Corp., misled investors by overstating the capabilities and commercial viability of its Centrellis health intelligence platform.
The complaint further alleges that these false statements caused GeneDx's stock to trade at artificially inflated prices. The court found that the complaint sufficiently detailed allegations that the defendants made false and misleading statements with an intent to defraud.
Additionally, the lawsuit incorporates allegations from a February 5, 2025, Grizzly Research report, which accused GeneDx of 'widespread fraud' and 'illegal billing practices,' specifically 'code stacking,' to artificially inflate Medicaid and Medicare revenue. The report also cited a pattern of CEO and CFO selling shares upon vesting without open market acquisitions, suggesting insider awareness of potential issues.
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