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Friday, December 6, 2019

Stock drop for SmileDirectClub results in lawsuit

Federal Court

By Carrie Bradon | Oct 11, 2019

Sec

DETROIT (Legal Newsline) — A SmileDirectClub stockholder alleges the company's deceptive practices caused him to suffer economic losses. 

Richard Andre, individually and on behalf of all others similarly situated, filed a complaint on Oct. 2 in the U.S. District Court for the Eastern District of Michigan against SmileDirectClub Inc., J.P. Morgan Securities LLC, CitiGroup Global Markets Inc. and others alleging violation of federal securities laws.

The plaintiff is a stockholder of SmileDirectClub, a teeth-alignment company offering remote straightening services for customers who want to improve the alignment of their teeth. 

The suit states SmileDirectClub received proceeds of approximately $1.27 billion from its stock offering in September. On Sept. 24, a class action lawsuit against it was filed by dentists, orthodontists and consumers who alleged false advertising, fraud and other allegations. The defendant’s share price fell nearly 9 percent the same day the complaint was filed, the suit states.

The plaintiff alleges the registration statement SmileDirectClub filed on Sept. 13 was false and misleading and failed to disclose to investors that the company's practices did not qualify as teledentistry because administrative personnel instead of doctors provided treatment to customers. The plaintiff alleges he suffered significant damages and losses.

The plaintiff is seeking trial by jury, attorneys’ fees, court costs, interest and just relief. The plaintiff is represented by E. Powell Miller, Marc L. Newman and Sharon S. Almonrode of The Miller Law Firm in Rochester, Michingan, and Robert V. Prongay, Lesley F. Portnoy, Charles H. Linehan and Pavithra Rajesh of Glancy, Prongay & Murray LLP in Los Angeles.

U.S. District Court for the Eastern District of Michigan case number 2:19-cv-12883

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