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PHILADELPHIA, Oct. 03, 2019 (GLOBE NEWSWIRE) -- Kehoe Law Firm, P.C. is making investors and shareholders of SmileDirectClub, Inc. (“SmileDirectClub” or the “Company”) (NASDAQ: SDC) aware that a class action lawsuit was filed on October 2, 2019 in United States District Court against SmileDirectClub on behalf of persons and entities that purchased, or otherwise acquired, the Class A common stock of SmileDirectClub pursuant and/or traceable to the registration statement and prospectus (collectively, the “Registration Statement”) issued in connection with the Company’s September 2019 initial public offering (“IPO”). The class action is pursuing claims under Sections 11 and 15 of the Securities Act of 1933.
If you purchased the securities of SmileDirectClub, Inc. pursuant and/or traceable to the registration statement and prospectus issued in connection with SmileDirectClub’s September 2019 IPO and suffered financial losses, please click Join a Securities Class Action to participate in the lawsuit or contact either Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, firstname.lastname@example.org, email@example.com, or John Kehoe, Esq., (215) 792-6676, Ext. 801, firstname.lastname@example.org, to learn more about the lawsuit or the securities investigation.
According to the class action complaint:
On September 13, 2019, the Company filed its prospectus on Form 424B4 with the SEC, which forms part of the Registration Statement. In the IPO, the Company sold approximately 58.5 million shares of Class A common stock at a price of $23.00 per share. The Company received proceeds of approximately $1.27 billion from the Offering, net of underwriting discounts and commissions. The proceeds from the IPO were purportedly to be used for employee incentive bonuses, certain equity arrangements, and general corporate purposes.
On September 24, 2019, a class action complaint was filed by dentists, orthodontists, and consumers against SmileDirectClub, alleging false advertising, fraud, negligence, and unfair and deceptive trade practices. The complaint disputed the accuracy of several statements in the Registration Statement and highlighted that the Company is subject to litigation for operating as a dentist without proper licensing in several states, as well as other litigation.
On this news, [SmileDirectClub’s] share price fell $1.47, or nearly 9%, to close at $15.68 per share on September 24, 2019, on unusually heavy trading volume. The price stock continued to decline over the next two trading sessions by $2.74, or over 17%, to close at $12.94 per share on September 26, 2019, on unusually heavy trading volume.
By the commencement of [the class action], the Company’s stock was trading as low as $12.94 per share, a nearly 44% decline from the $23 IPO price. [Emphasis added.]
According to the class action complaint:
[t]he Registration Statement was false and misleading and omitted to state material adverse facts. Specifically, Defendants failed to disclose to investors: (1) that administrative personnel, rather than licensed doctors, provided treatment to the Company’s customers and monitored their progress; (2) that, as a result, [SmileDirectClub’s] practices did not qualify as teledentistry under applicable standards; (3) that, as a result, the Company was subject to regulatory scrutiny for the unlicensed practice of dentistry; (4) that the efficacy of [SmileDirectClub’s] treatment was overstated; (5) that the Company had concealed these deceptive marketing practices prior to the IPO; and (6) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects, were materially misleading and/or lacked a reasonable basis. [Emphasis added.]
Again, SmileDirectClub, Inc. investors who bought SmileDirectClub securities, pursuant and/or traceable to the registration statement and prospectus issued in connection with SmileDirectClub’s September 2019 IPO, and suffered financial losses, are encouraged to click Join a Securities Class Action to participate in the lawsuit or contact either Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, email@example.com, firstname.lastname@example.org, or John Kehoe, Esq., (215) 792-6676, Ext. 801, email@example.com, to learn more about the lawsuit or the securities investigation.
Kehoe Law Firm, P.C., with offices in New York and Philadelphia, is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors from securities fraud, breaches of fiduciary duties, and corporate misconduct. Combined, the partners at Kehoe Law Firm have served as Lead Counsel or Co-Lead Counsel in cases that have recovered more than $10 billion dollars on behalf of institutional and individual investors.