Proposed Investor Suit Targets Hims as FTC Provision Reaches $60 Million
Key Facts
Hims & Hers faces a proposed securities class action accusing it of failing to inform investors about consumer-related practices, in a case separate from the federal lawsuit brought by the Federal Trade Commission alongside Utah and Los Angeles on behalf of California. According to Bloomberg Law, the investor suit alleges the company did not disclose those practices before the government case prompted scrutiny of its business. The proposed suit was filed on September 1, with a November 2 deadline to seek appointment as lead plaintiff. These allegations do not constitute a court ruling, and the federal case itself has yet to be decided. The FTC said, "The court will decide the case."
The government case is based on allegations concerning health data privacy, billing and cancellation. The commission says Hims shared consumers’ health information with advertising platforms, including Meta and Snap, through customer lists and tracking technologies that send events from website visitors. It also alleges that most consumers do not receive a consultation with a provider before being charged for a prescription and enrolled in a recurring subscription after submitting an intake form. The commission’s director of the Bureau of Consumer Protection described the complaint as involving subscriptions "that may trap consumers without their knowledge," as well as the disclosure of private health information to third parties without their consent. These points remain allegations in a complaint before the court.
The government action quickly affected trading in late July: Hims shares fell 15% to $25 in New York trading on July 29, their lowest level since February 9, according to Bloomberg Law. This was a dated market reaction to the federal lawsuit, while the available information does not establish that the decline prompted lawyers to file the investor suit. In EL7’s disclosure, the stock closed at $27.59 on October 26. That figure is the daily close for that date; EL7’s supplied data do not include the session’s high or low. The October close therefore remains a separate reading from the stock’s move on the day the government case was announced.
Hims included a provision of about $60 million for a legal obligation related to the FTC case in its quarterly report, as of June 30, 2026. This is an amount the company recorded in its disclosure, not a court judgment or an imposed fine. Hims said it believes it has "meritorious defenses" and will vigorously defend against the allegations, while acknowledging that the litigation’s outcome is uncertain. In response to the government lawsuit, the company called the allegations "baseless" and said it would defend itself. The disclosure also identifies a separate privacy class action seeking statutory, compensatory and punitive damages, as well as injunctive relief; the company said it cannot estimate the outcome of that case or potential losses from it.
The regulatory process began long before the federal lawsuit was filed. According to the company’s filing with the Securities and Exchange Commission, the FTC issued Hims a civil investigative demand in October 2023, covering privacy, advertising, subscriptions and cancellation as part of a nonpublic investigation. In April 2026, the company said it had entered settlement discussions with the commission. The commission and participating government authorities then filed the federal lawsuit over the alleged practices, alongside ongoing court proceedings that include the investor and privacy suits. Hims & Hers plans to report third-quarter results on November 9, 2026, its next scheduled financial update.