A shareholder has filed a lawsuit against the leadership of LifeMD, Inc., alleging misconduct that harmed the company’s financial position and reputation.
Plaintiff James Poulos filed a verified stockholder derivative complaint against LifeMD’s executives and board members, accusing them of breaching fiduciary duties and violating federal law. LifeMD, known for its virtual medical consultations under brands such as RexMD, is accused of misleading investors about its business prospects between May and August 2025. The lawsuit claims the company overstated growth potential while failing to disclose increasing customer acquisition costs tied to its men’s health brand and weight loss medications. On August 5, 2025, LifeMD revised its fiscal guidance downward due to higher refund rates and rising acquisition costs. Following this announcement, the company’s stock price reportedly dropped by nearly 45% overnight.
The complaint also alleges that certain insiders profited before the decline. CEO Justin Schreiber is accused of selling a significant number of shares shortly before the adverse announcement, raising concerns about potential insider trading. Poulos argues that these actions breached fiduciary duties and placed shareholder interests at risk.
Poulos is seeking damages for financial losses allegedly caused by management’s conduct, as well as reforms to strengthen corporate governance. The lawsuit requests disgorgement or restitution from defendants who benefited and punitive damages to deter similar conduct in the future.
The plaintiff is represented by attorneys Joshua H. Grabar of Grabar Law Office, and Timothy J. MacFall and Gina M. Serra of Rigrodsky Law P.A. The case was filed in the United States District Court for the Eastern District of New York under Case No. 2:25-cv-05197.