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Grizzly Research (“Grizzly”) published a report on February 5, 2025, entitled “Insiders Attest That GeneDx (Nasdaq: WGS) Is Actively Committing Widespread Fraud”. The Grizzly report asserted, among other things, that GeneDx’s “growth is largely an illusion, driven by fraudulent schemes and illegal tactics deliberately aimed at exploiting Medicaid and Medicare systems to artificially inflate revenue”; that “[t]estimonies from former employees and ongoing litigation suggest that GeneDx has inflated its revenue through an illegal practice known as ‘code stacking'”, which “enables the company to bill insurance providers for services that do not meet the required criteria”; and that “CEO Katherine Stueland and CFO Kevin Feeley have consistently sold their shares immediately upon vesting, without ever engaging in open market purchases”, a “pattern suggest[ing] that insiders may be aware of an imminent risk that will significantly impact the company.”
Following this news, GeneDx’s stock price fell over 6% on the same day.