Teladoc Health, Inc.
- Company Name
- Teladoc Health, Inc.
- Stock Symbol
- Class Period
- March 3, 2016 to December 5, 2018
- Motion Deadline
- February 10, 2019
- Southern District of New York
The complaint charges Teladoc and certain of its officers with violations of the Securities Exchange Act of 1934. Teladoc provides telehealth services worldwide. The Company offers a portfolio of services and solutions covering 450 medical subspecialties, such as flu and upper respiratory infections, cancer, and congestive heart failure. Teladoc provides its services through mobile devices, the Internet, video, and over the phone to health plans, health systems, and other entities.
The complaint alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose adverse information regarding the Company’s business, operations and compliance policies. Specifically, contrary to the Company’s stated commitment to “the highest standards of integrity and ethics in the way it conducts business,” defendant Mark Hirschhorn (“Hirschhorn”), Teladoc’s Executive Vice President, Chief Operating Officer, and Chief Financial Officer, was engaged in an inappropriate sexual relationship with a subordinate during the Class Period. According to the complaint, Hirschhorn and this subordinate engaged in insider trading to provide themselves with undue benefits, Hirschhorn caused the subordinate to receive promotions for which she was unqualified, thereby negatively impacting the Company’s operations, and the Company’s enforcement of its own purported employment and trading policies was inadequate to prevent the foregoing conduct. As a result of this information being withheld from investors, Teladoc securities traded at artificially inflated prices of more than $80 per share during the Class Period.
Then on December 5, 2018, the Southern Investigative Research Foundation (“SIRF”) published an article reporting that Hirschhorn had engaged “in an affair with . . . an employee many levels below him on the company’s organizational chart.” The SIRF article stated that “during their relationship, [the employee] received a series of promotions over colleagues with either more industry experience or better credentials that stunned her former colleagues.” In addition, the SIRF article reported that Hirschhorn and the employee “liked to trade Teladoc Health’s stock together,” with Hirschhorn “tell[ing] her when he thought there were good opportunities to sell some shares.” Following publication of the SIRF article, Teladoc’s stock price fell $4.00 per share, or nearly 7%, to close at $55.81 per share on December 6, 2018.