PHILADELPHIA, Oct. 7, 2019 /PRNewswire/ -- Berger Montague announces that a class action lawsuit has been filed against SmileDirectClub, Inc. ("SmileDirect" or the "Company") ("SDC") on behalf of persons and entities that purchased or otherwise acquired SmileDirect Class A common stock pursuant and/or traceable to the Registration Statement and Prospectus issued in connection with the Company's September 2019 initial public offering ("Class Period"). SmileDirect's stock has traded as low as $12.94 per share, a nearly 44% decline from the $23.00 IPO price.
If you wish to discuss the claims against SmileDirect or have any questions concerning your rights or interests, please contact Barbara A. Podell, Esq. at (215) 875-4690 or Michael Dell'Angelo, Esq. at (215) 875-3080. You can also visit the SmileDirect page on our website, fill out the form on the page, and we will contact you. If you purchased or acquired SmileDirect Class A common stock during the Class Period and suffered damages, you may, no later than December 2, 2019, request that the Court appoint you lead plaintiff of the proposed Class. You do not need to be a lead plaintiff to share in any possible recovery to the Class.
Smile Direct Club IPO
In September 2019, SmileDirect sold approximately 58.5 million shares of Class A common stock at a price of $23.00 per share in an initial public offering ("IPO"). 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 dentists' false advertising 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, SmileDirect's share price fell nearly 9% ($1.47) to close at $15.68 per share on September 24, 2019. SmileDirect's stock has since traded as low as $12.94 per share, a nearly 44% decline from the $23.00 IPO price.
Smile Direct Club Scam
The securities class action complaint alleges that Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts to investors, including that:
- Administrative personnel, rather than licensed doctors, provided treatment to SmileDirect's customers and monitored their progress;
- SmileDirect's practices did not qualify as teledentistry under applicable standards;
- SmileDirect was subject to regulatory scrutiny for the unlicensed practice of dentistry;
- The efficacy of SmileDirect's treatment was overstated;
- SmileDirect concealed these deceptive marketing practices prior to the IPO; and
- As a result, Defendants' positive statements about SmileDirect's business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
Berger Montague, with offices in Philadelphia, Minneapolis, Washington, D.C., and San Diego, has been a pioneer in securities class action litigation since its founding in 1970. Berger Montague has represented individual and institutional investors for over four decades and serves as lead counsel in courts throughout the United States. For more information, visit www.bergermontague.com.
Barbara A. Podell
SOURCE Berger Montague