Teladoc Health shareholders have filed a class-action lawsuit against the company after an investigative report alleged Teladoc COO and CFO Mark Hirschhorn had an inappropriate relationship with an employee and engaged in insider trading.
Here are eight things to know about the lawsuit:
1. The SIRF report, published by the Southern Investigative Research Foundation a week before Teladoc's shareholders filed the lawsuit, alleges Mr. Hirschhorn had a two-year affair with Charece Griffin, an employee many levels below him. The report says the two did not keep their relationship a secret.
2. Ms. Griffin was promoted several times during the course of the relationship, while others with reputedly more industry experience or better credentials had been passed over.
3. Additionally, the report claims Mr. Hirschhorn would tell Ms. Griffin when he thought there were good opportunities to sell Teladoc shares.
4. On Dec. 5, the same day the SIRF report was published, Teladoc issued a statement saying the report "contains several factual inaccuracies."
"When we were made aware of the allegations against Mark Hirschhorn in 2016, we engaged an outside law firm to investigate the claims. That investigation found violations solely of our workplace relationship policy, and our board of directors took swift and appropriate disciplinary action to address the violations. This matter was handled in a prompt, thorough and fair manner," the statement reads.
5. The complaint, filed Dec. 12 by shareholder Jon Reiner, alleges Teladoc misled its shareholders in failing to disclose Mr. Hirschhorn's relationship and alleged insider trading, in violation of the company's policies.
6. Both Mr. Hirschhorn and Teladoc CEO Jason Gorevic are named as defendants in the lawsuit.
7. After SIRF published its report, Teladoc's stock dropped 6.7 percent, which the complaint says is "significant losses and damages" for shareholders.
8. Teladoc provided Becker's Hospital Review with the following statement:
"We deny the allegations contained in the lawsuit and reject any claim that we made materially false or misleading statements regarding our business, operations and compliance policies. When we were made aware of the allegations against Mark Hirschhorn in 2016, we engaged an outside law firm to investigate the claims. The investigation found no evidence of securities law or any other legal violations. We will respond to these claims through the legal process."
This article was updated Dec. 13 at 4 p.m. to include a statement from Teladoc Health.