iRhythm Technologies $45M Securities Class Action Settlement

Investors who purchased or otherwise acquired iRhythm Technologies Inc. common stock between July 25, 2022, and Aug. 9, 2024, may be eligible to claim a cash payment from a class action settlement.

iRhythm Technologies Inc. and its chief executive officer agreed to pay $45 million to settle a securities class action lawsuit alleging they made materially false and misleading statements about the company's Zio AT heart monitoring device. The lawsuit claimed the statements misrepresented the device's near real-time data transmission capabilities, its appropriateness for high-risk patients and the accuracy of the data it reported.

Who can file a claim?

The settlement class includes all persons and entities who purchased or otherwise acquired iRhythm Technologies Inc. common stock between July 25, 2022, and Aug. 9, 2024, inclusive, and suffered damages as a result.

Additional details

• Both individuals and entities can be class members.
• The settlement includes investors who held stock in their own name and those who held through a broker or other nominee.
• The beneficial owner, not the record owner, must sign the claim form.
• Joint owners must each sign the claim form.
• Agents, executors, administrators, guardians and trustees may submit claims on behalf of others and must provide proof of authority.
• Each separate legal entity or separately managed account must submit a separate claim.
• Participants in and beneficiaries of an iRhythm employee benefit plan covered by the Employee Retirement Income Security Act of 1974 should not include shares held through the plan on an individual claim form.

How much can class members get?

The total settlement fund is $45,000,000. The amount each class member will receive depends on several factors:

• The number of valid claims submitted
• The number of shares purchased or acquired during the class period
• The timing and price of each purchase and sale
• The total recognized claims of all claimants

The settlement administrator will distribute payments on a pro rata basis according to the court-approved plan of allocation:

• The estimated average recovery is about $1.83 per eligible share before deductions for attorneys' fees and expenses, taxes and administration costs. After estimated deductions of about $0.49 per share, the estimated average recovery is about $1.34 per share.
• Actual payments may be higher or lower depending on individual claims and the total number of valid claims.
• The settlement administrator will calculate each class member's payment based on the recognized loss amount assigned to each purchase.
• Recognized loss amounts depend mainly on the artificial inflation in the stock price on the purchase date and sale date listed by date in Table A (page 20 of the settlement notice).
• For shares sold before the close of trading on Nov. 1, 2022, the recognized loss is $0.
• For shares sold between Nov. 2, 2022, and the close of trading on Aug. 9, 2024, the recognized loss is the lesser of the artificial inflation on the purchase date minus the artificial inflation on the sale date or the purchase price minus the sale price.
• For shares sold between Aug. 12, 2024, and the close of trading on Nov. 8, 2024, the recognized loss is the least of the artificial inflation on the purchase date, the purchase price minus the average closing price from Aug. 12, 2024, through the sale date (p. 21 of the settlement notice), or the purchase price minus the sale price.
• For shares held as of the close of trading on Nov. 8, 2024, the recognized loss is the lesser of the artificial inflation on the purchase date or the purchase price minus $70.38, the average closing price during the 90-day look-back period.

• The settlement administrator will match purchases and sales on a first-in, first-out basis.
• Claimants who gained money overall on their class period transactions will have a recognized claim of $0.
• Claimants who lost less money overall than their calculated recognized claim will have that claim limited to the amount they lost.
• The settlement administrator will set any recognized loss that calculates to zero or a negative number to $0.
• Each claimant's payment equals their recognized claim divided by the total recognized claims of all claimants multiplied by the net settlement fund.
• Class members whose payment would be less than $10 will not receive a payout.

How to claim an iRhythm securities class action settlement payment

Class members may file a claim online or download, print and complete the PDF claim form and mail it to the settlement administrator. The claim deadline is Oct. 1, 2026.

Settlement administrator's mailing address: iRhythm Securities Litigation, c/o Strategic Claims Services, P.O. Box 230, 600 N. Jackson St., Suite 205 Media, PA 19063

Proof or documentation required to submit a claim

All class members must provide the last four digits of their Social Security number or taxpayer identification number. They must also provide holdings and transaction information, including:

• Number of shares held as of the opening of trading on July 25, 2022
• Trade dates for purchases and sales through Nov. 8, 2024
• Number of shares purchased, acquired or sold
• Price per share and total purchase or sale price
• Number of shares held as of the close of trading on Nov. 8, 2024

Class members must also provide documentation to support their holdings and transactions in iRhythm common stock. Acceptable proof includes:

• Trade confirmations
• Account statements
• Authorized statements from a broker or other financial institution containing the transactional and holding information found in a trade confirmation or account statement

Payout options

• Physical check

$45 million settlement fund

The $45,000,000 settlement fund includes:

• Settlement administration costs: To be determined
• Attorneys' fees: Up to $11,250,000
• Attorneys' expenses: Up to $800,000
• Service award to plaintiff: Up to $10,000 total
• Payments to eligible class members: Remainder of the fund

Important dates

• Deadline to file a claim: Oct. 1, 2026
• Opt-out deadline: Oct. 1, 2026
• Fairness hearing: Nov. 5, 2026

When is the iRhythm securities class action settlement payout date?

The settlement administrator will issue payments after the court grants final approval of the settlement, any appeals are resolved and it completes processing of all claims.

Why did this class action settlement happen?

The class action lawsuit alleged iRhythm and its chief executive officer made false and misleading statements about the Zio AT heart monitoring device, including its data transmission capabilities, its appropriateness for high-risk patients and the accuracy of the data it reported. The plaintiff claimed these statements inflated iRhythm's stock price and caused investor losses.

The defendants denied all allegations of wrongdoing but agreed to settle to avoid the costs, risks and delays of continued litigation.

Sources

1. Class notice
2. Claim form