The lawsuit, filed by Hagens Berman, claims ADMA Biologics artificially inflated its market value by utilizing channel stuffing to manufacture the appearance of revenue growth. According to the complaint, the company failed to disclose a significant related-party transaction involving Genesis BioPharma, while maintaining inadequate internal financial controls. These omissions allegedly left investors with a misleading picture of the company’s actual business health.

Market volatility intensified following a March 2026 report by Culper Research, which detailed the alleged distribution irregularities. Shares plummeted over 31% during the two-day period following the report's release. Confidence further eroded on March 26, when ADMA Biologics announced it was reviewing the assertions, prompting a stock rating downgrade from Cantor Fitzgerald that pushed the share price down an additional 13.9% to $8.29. Reed Kathrein, the Hagens Berman partner heading the investigation, stated the firm is examining whether the company deliberately concealed the reality of its distribution channels and financial reporting standards.