A class action lawsuit was filed against Sharecare, Inc. (NASDAQ:SHCR) on April 19, 2024. The plaintiffs (shareholders) alleged that they bought SHCR stock at artificially inflated prices between May 10, 2023 and March 28, 2024 (Class Period) and are now seeking compensation for their financial losses. Investors who bought SHCR stock during that period can click here to learn about joining the lawsuit.
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Sharecare is a digital health company that links millions of patients, caregivers, health organizations, and government entities. Sharecare’s comprehensive health and well-being digital platform seeks to simplify access to care, improve outcomes, and reduce costs.
The plaintiffs maintain that Sharecare and two of its senior officers deceived investors by lying and withholding vital information about the company’s business practices and prospects during the Class Period. Importantly, they are accused of omitting truthful information about the adequacy of the company’s internal controls and ancillary issues from SEC filings and related material.
The information became clear on March 29, when the company filed its Fiscal 2023 Annual report with the SEC. In the report, Sharecare notified that the company’s internal audit revealed that the company was not maintaining “adequate internal controls with respect to its revenue recognition evaluation resulting from a change in services provided to a customer, due to untimely communication between cross-functional teams.” Sharecare cited material weakness in its internal controls and disclosures over financial reporting.
In stark contrast, the company had reiterated in the quarterly reports for Q1, Q2, and Q3 of Fiscal 2023 that its internal controls and procedures were effective.
As per the class action lawsuit, Sharecare caused its stock to trade at artificially inflated prices by knowingly and recklessly misleading investors about the company’s business practices during the Class Period.
Notably, SHCR stock plunged 28.4% on April 1, causing massive damage to shareholders’ returns.
