The lawsuit, led by the firm Hagens Berman, centers on allegations that the company misled shareholders regarding its internal data safeguards and business operations. According to the complaint, Hims shared sensitive patient health information with third-party advertising platforms, including Meta and Snap, while simultaneously marketing its services as strictly private and secure.
Regulators further contend that Hims violated the Restore Online Shoppers' Confidence Act by trapping customers in recurring subscription models. The firm alleges that users were billed for prescriptions immediately upon submitting intake forms, often before consulting with a medical provider, and encountered significant hurdles when attempting to cancel their plans. These claims gained momentum following a July 29, 2026, regulatory filing by the FTC alongside officials from Utah and Los Angeles County.
The market reaction to these revelations was immediate, as Hims shares plummeted 14.7%, erasing roughly $970 million in market capitalization in a single trading session. Reed Kathrein, a partner at Hagens Berman, stated that the firm is investigating whether leadership intentionally misrepresented the adequacy of internal controls and the potential financial impact of the regulatory scrutiny. Investors seeking to serve as lead plaintiffs must meet a November 2, 2026, deadline to participate in the ongoing litigation.
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