REMINDER: Class action lawsuits have implications for investors

REMINDER: Class action lawsuits have implications for investors

The Importance of Shareholder Rights in Class Actions

As an editor of an online legal journal and an expert in the field of law, it is essential to highlight the significance of shareholder rights in class actions. Recently, class action lawsuits have been commenced on behalf of stockholders of InMode Ltd. (NASDAQ: INMD), Lantronix, Inc. (NASDAQ: LTRX), and Palo Alto Networks, Inc. (NASDAQ: PANW).

The Allegations Made Against InMode Ltd.

InMode is a global provider of aesthetic medical devices and technology, including devices purporting to offer body sculpting and other rejuvenation technologies. The complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements and omissions concerning two topics that are of critical importance to investors:

  1. The price at which InMode sells its devices, which reflects the demand for those products.
  2. InMode’s compliance with U. S. Food and Drug Administration (“FDA”) regulations.

Specifically, Defendants repeatedly touted the demand for InMode’s devices and told investors that those devices were never sold at a discount. InMode also assured investors that it had “obtained [FDA] clearance for the current treatments for which we offer our products.”

However, according to the complaint, in reality, throughout the Class Period, InMode routinely discounted the prices of its devices and violated FDA regulations by promoting the off-label use of its devices, and by failing to properly report injuries caused by its devices. As a result of these misrepresentations, the price of InMode common stock traded at artificially inflated prices throughout the Class Period. It was later revealed that InMode threatened some customers with legal action over complaints made about the Company’s devices and sales tactics, which resulted in the company’s stock price declining.

The Allegations Made Against Lantronix, Inc.

Lantronix is a global industrial and enterprise internet of things (“IoT”) provider of solutions that purportedly target high growth applications in specific verticals such as smart grids, intelligent transportation, smart cities, and artificial intelligence data centers.

In May 2023, Lantronix forecasted that it would achieve revenue in a range of $175 million to $185 million, as well as non-GAAP earnings-per-share (“EPS”) in a range of $0.50 to $0.60 per share, for its fiscal year 2024 results. However, the Complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and prospects.

On February 8, 2024, Lantronix issued a press release announcing its financial results for the second quarter of its fiscal year 2024. Therein, the Company negatively revised its fiscal year 2024 guidance. Following these disclosures, Lantronix’s stock price fell precipitously.

The Allegations Made Against Palo Alto Networks, Inc.

Palo Alto Networks is a cybersecurity company that provides advanced security solutions to a broad range of customers. The lawsuit alleges that throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material facts.

After the market close on February 20, 2024, Palo Alto Networks announced financial results for the second quarter of 2024 and lowered its third quarter and full-year billings and revenue guidance. On this news, the price of Palo Alto Networks, Inc. common stock declined substantially.


Shareholder rights are of critical importance, and class actions are a vital tool to protect those rights. The lawsuits against InMode Ltd., Lantronix, Inc., and Palo Alto Networks, Inc. highlight the significance of shareholder rights and the essential role that class actions play in protecting those rights.

As a legal journalist, it is crucial to provide accurate and reliable information to readers about the implications of such cases on investor confidence, stock prices, and corporate governance. Transparency and honesty are essential values to uphold to ensure that justice is served, and companies are held accountable for their actions.

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