Securities Regulation Daily Wrap Up, FRAUD AND MANIPULATION—S.D.N.Y.: Misstatements about its top device caused significant losses, DexCom shareholders allege, (Oct 28, 2025)

By Rebecca E. Hoffman, J.D.

The complaint alleges that shareholders purchased stock at artificially inflated prices, which dropped after the FDA’s warning letter and negative reports from research firms.

Those who purchased shares of continuous glucose monitoring (CGM) device maker DexCom between July 26, 2024, and Sept. 17, 2025, charged the company and its principals with falsely touting their product’s quality, accuracy, and reliability, when in fact the company had altered the product for the worse (Prime v. DexCom, Inc., No. 1:25-cv-08912 (S.D.N.Y. Oct. 27, 2025)).

Parties. DexCom, Inc. is a Delaware corporation located in California. According to the complaint, the company’s “DexCom G7” GCM system is its “flagship” product. The individual defendants are DexCom’s former CEO and board chair, its COO, and its CFO and executive vice president, all of whom purportedly sold thousands of shares during the class period, making millions.

Jurisdiction. The matter is properly in federal court, the complaint avers, because the plaintiff alleges violations of Exchange Act Section 10(b), 20(a), and Rule 10b-5. Further, the defendants engaged in interstate commerce in connection with the alleged conduct. Venue is proper because the stock trades on NASDAQ, which is located in the Southern District of New York.

Facts. The complaint states that the defendants made design changes to the G7 that the FDA did not sanction. As a result of these changes, the G7 device did not work as well; in fact, customers became ill and died as a result of the device displaying inaccurate blood glucose readings and failing to warn of dangerously high or low levels. The plaintiff claimed, therefore, that the defendants’ statements during the relevant time were false or misleading as to the device’s “purported enhancements [and its] reliability, accuracy, and functionality.”

The stock price dropped for the first time after the company disclosed that the FDA had sent a “warning letter” discussing the agency’s concerns about manufacturing and quality control. Thereafter, the FDA published the letter on its website, informing the public that DexCom had altered sensors on its G6 and G7 devices, which triggered another decline. Further price drops followed Oppenheimer and Hunterbrook’s reports, the former noting problems with accuracy and stoppages, and the latter stating that “‘G7 users have been hospitalized and died’ following inaccurate glucose readings, linking these deadly incidents to adulterated G7 devices and Defendants’ willingness to cut corners to meet margins.”

Claims. The plaintiff takes issue with statements defendants made during conference calls, in SEC filings, and in press releases, which were allegedly false or misleading. For example, during a conference call, the former CEO, referring to DexCom’s Type 1 diabetes customers who use the device in conjunction with insulin pumps, said: “‘We update our hardware and our app experience … on a regular basis to enrich the experiences of the[se] customers, and we believe we do that better than anybody else. Over time, our reputation in this market and one of the places we’ve been always strong is in this Type 1 market because that has been where we have had the largest market share advantage for a very long time and we intend to maintain that through the higher quality of our product …. The accuracy of DexCom is tried and true and proven to these patients.”

According to the complaint, “Defendants downplayed the true scope and severity of the issues and health risks posed by adulterated G7 devices” and “subjected DexCom to an increased risk of heightened regulatory scrutiny and enforcement action, as well as significant legal, reputational, and financial harm.” The plaintiff also alleged that the individual defendants acted with scienter, in that they were motivated to keep the stock value up to make a profit from selling their own shares. Moreover, they had actual knowledge or reckless disregard for the truth in making their fraudulent statements—statements that surely would cause reasonable investors to misjudge the value of DexCom stock.

Relief requested. The plaintiff seeks damages, pre- and post-judgment interest, and costs.

The case is No. 1:25-cv-08912.

Attorneys: Jeremy Alan Lieberman (Pomerantz LLP) for Erik Prime.

Companies: DexCom, Inc.

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