LOS ANGELES--(BUSINESS WIRE)--Glancy Prongay & Murray LLP (“GPM”) announces that it has filed a class action lawsuit in the United States District Court for the Eastern District of Michigan captioned Andre v. SmileDirectClub, Inc., et al., (Case No. 2:19-cv-12883), on behalf of persons and entities that purchased or otherwise acquired SmileDirectClub, Inc. (NASDAQ: SDC) (“SmileDirectClub” or the “Company”) Class A common stock 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” or the “Offering”). Plaintiff pursues claims under Sections 11 and 15 of the Securities Act of 1933 (the “Securities Act”).
Investors are hereby notified that they have 60 days from the date of this notice to move the Court to serve as lead plaintiff in this action.
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In September 2019, the Company held its IPO in which it sold approximately 58.5 million shares of Class A common stock at a price of $23.00 per share.
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, the Company’s share price fell $1.47, or nearly 9%, to close at $15.68 per share on September 24, 2019, thereby injuring investors.
By the commencement of this action, the Company’s stock was trading as low as $12.94 per share, a nearly 44% decline from the $23 IPO price.
The complaint filed in this class action alleges that Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. 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, the Company’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 the Company’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.
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If you purchased SmileDirectClub Class A common stock pursuant or traceable to the Registration Statement, you may move the Court no later than 60 days from the date of this notice to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you wish to learn more about this action, or if you have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Lesley Portnoy, Esquire, of GPM, 1925 Century Park East, Suite 2100, Los Angeles, California 90067 at 310-201-9150, Toll-Free at 888-773-9224, by email to shareholders@glancylaw.com, or visit our website at www.glancylaw.com. If you inquire by email please include your mailing address, telephone number and number of shares purchased.
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