InMode Ltd. Litigation Report

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Published March 22, 2024

Case Introduction

Cement Masons’ and Plasters’ Local No. 502 Pension Fund v. Inmode Ltd., et al 2:24-cv-01219

On February 14, 2024, investors sued InMode Ltd. (“InMode” or the “Company”) in United States District Court for the Central District of California, Western Division.

Plaintiffs in the federal securities class action allege that they acquired InMode stock at artificially inflated prices between June 4, 2021, and October 12, 2023 (the “Class Period”). They are now seeking compensation for financial losses incurred upon public revelation of the Company’s alleged misconduct during that time. To learn whether you may be eligible for a recovery under this class action, go to:

Summary of the Allegations

Company Background

InMode (NASDAQ:INMD) is a self-described leading global provider of innovative and award winning medical technologies.

Accordingly, the Company says it engages in the development, manufacturing and marketing of platforms that use new radio-frequency (RF) based technology. The Company also claims that these platforms are meant to facilitate  “new emerging minimally-invasive procedures and improve existing surgical procedures.” Specifically, the Company says, its platforms can be used in  several surgical specialties, ranging from plastic surgery to gynecological, dermatological and ophthalmological procedures.

Summary of Facts

The Company and four of its senior executives (the Individual Defendants) are now accused of deceiving investors by lying and withholding important information about InMode’s business practices during the Class Period.

In particular, they are accused of omitting truthful information about the pricing of and demand for its products, and its compliance with certain regulations, from SEC filings and related material. By knowingly or recklessly doing so, they allegedly caused InMode stock to trade at artificially inflated prices during the time in question.

The truth came out in a series of events that occurred between February 17, 2023 and October 12, 2023. The first of these happened just before the markets closed on the 17th. That’s when an investigative publication “revealed that InMode threatened some customers with legal action over complaints made about the Company’s devices and sales tactics.” The customers also stated that “InMode offered to replace defective products on the condition of signing confidentiality agreements with non-disparagement clauses.’

Then, before the markets opened on the 12th, InMode lowered its full-year revenue guidance, blaming it on higher interest rates, tighter leasing approval standards, and bottlenecks in loan processing.

Later that same day, “an investigative publication announced a forthcoming report on InMode, relating to the Company’s statements to investors about pricing flexibility of products and margin consistency.” After the close of trading, the publication released that story, revealing that the Company had “routinely and significantly discounted the prices of its devices throughout the Class Period.”

A closer look…

As alleged, the Company and/or Individual Defendants repeatedly made false and misleading public statements throughout the Class Period.

In a quarterly report filed with the SEC on July 28, 2021, for instance, the president of InMode’s North America Division (an Individual Defendant) stated in relevant part: ““We have also seen higher overall transaction amounts, which is attributed to the growing demand for our products. . . . We are pleased to see high physician and patient satisfaction with our products and services.”

Then, in a quarterly report filed with the SEC on May 2, 2022, the same Individual Defendant stated in pertinent part: ““[w]e are optimistic about the overall demand for our products and anticipate that the North American business will continue to grow and be the main revenue contributor for InMode.”

Finally, in a quarterly report filed with the SEC on October 27, 2022, the same Individual Defendant stated in relevant part: “Our performance in North America continues to be the major growth engine for the company, with an emphasis on the Morpheus8 becoming one of the most popular minimally invasive procedures.”

Actions You May Take

If you have purchased the Company’s stock during the Class Period, you may join the class action as a lead plaintiff, remain a passive class member, or opt out of this litigation and pursue individual claims that may not be available to the class as a whole. To learn more about your options, go to:

NOTE: The deadline to file for lead plaintiff in this class action is April 15, 2024. You must file an application to be appointed lead plaintiff prior to this deadline in order to be considered by the Court.