Shareholder Derivative Action Filed Against Certain Officers and Directors of Align Technology – Kehoe Law Firm, P.C. Investigating Breach of Fiduciary Duty Claims
Kehoe Law Firm, P.C. is making investors aware that on May 4, 2020, a verified shareholder derivative complaint was filed in United States District Court, Northern District of California, against certain officers and directors of Align Technology, Inc. (“Align” or the “Company”) (NASDAQ: ALGN) seeking to remedy alleged breaches of fiduciary duties, insider trading, and violations of §10(b) of the Securities Exchange Act of 1934.
According to the complaint:
Align is a medical device company that designs, manufactures, and markets devices to treat misaligned teeth. It has two operating segments: (i) Clear Aligners, which markets Invisalign clear dental aligners; and (ii) Scanners and Services, which markets iTero intraoral scanners used to diagnose misalignment and fit Invisalign aligners. China, which is part of the Asia Pacific geographical market, is the second largest market for the Company after the United States.
In April 2019, the Company stated that its first quarter 2019 results reflected strong growth in markets led by certain countries, including China. At conferences throughout May and June 2019, Align continued to represent that, despite competition, the Company experienced growth in China due to recent investments including manufacturing and training facilities near its Chinese customers.
On July 24, 2019, Align revealed lower case shipments of its Invisalign product during second quarter 2019 “primarily due to a softness in China.”
On this news, Align’s stock price fell $74.26, or nearly 27%, to close at $200.90 per share on July 25, 2019.
These revelations precipitated the filing of a securities class action in this District against Align and certain of defendants, captioned City of Roseville Employees’ Retirement System v. Align Technology, Inc., et al. . . ..
The shareholder derivative complaint alleges that the Align
. . . Defendants’ conduct set forth [in the shareholder derivative complaint] was due to their intentional or reckless breach of the fiduciary duties they owed to the Company. The Individual Defendants intentionally or recklessly breached or disregarded their fiduciary duties to protect the rights and interests of Align.
In breach of their fiduciary duties owed to Align, the Individual Defendants willfully participated in and caused the Company to expend unnecessarily its corporate funds, rendering them personally liable to the Company for breaching their fiduciary duties.
In particular, the Individual Defendants knowingly or recklessly made untrue statements and/or permitted the Company’s public filings, disclosures, and statements to misleadingly represent the demand for Align’s products in China.
As a direct and proximate result of the Individual Defendants’ breaches of their fiduciary obligations, Align has sustained and continues to sustain significant damages. Including direct monetary damages, exposure to liability from securities litigation and a loss of goodwill in the capital markets. As a result of the misconduct alleged herein, defendants are liable to the Company. [Emphasis added.]
Investors who have continuously held Align Technology stock since August 2017 are encouraged to contact Kehoe Law Firm, P.C. by completing the form on the right or e-mailing [email protected] to discuss the investigation or potential legal claims.