Labaton Sucharow, a nationally ranked and award-winning shareholder rights firm, announces that a securities fraud class action lawsuit has been filed in the United States District Court for the Northern District of California against CareDx, Inc. (“CareDx” or the “Company”) (NASDAQ: CDNA) and certain of its executive officers (collectively, “Defendants”). The action asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and U.S. Securities and Exchange Commission (“SEC”) Rule 10b-5 promulgated thereunder on behalf of all persons or entities that purchased CareDx common stock between February 24, 2021, and May 5, 2022, inclusive (the “Class Period”), and were damaged thereby (the “Class”). The action is Plumbers & Pipefitters Local Union #295 Pension Fund v. CareDx, Inc., et al., No. 3:22-cv-03023 (N.D. Cal.).
On October 28, 2021, CareDx filed its quarterly report for the third quarter of 2021 on Form 10-Q with the SEC. In the quarterly report, CareDx revealed for the first time that CareDx was the subject of at least three government investigations, reporting that: (1) the Company had "recently received" a civil investigative demand ("CID") from the U.S. Department of Justice ("DOJ") requesting the Company produce documents in connection with a DOJ False Claims Act investigation; (2) the Company received a subpoena from the SEC in relation to an investigation by the SEC "in respect to matters similar to those identified in the CID, as well as certain of our accounting and public reporting practices"; and (3) the Company received an information request from an unnamed state regulatory agency. On this news, CareDx's stock price fell $19.34 per share, or more than 27%, to close at $51.00 per share on October 29, 2021.
Then, on April 15, 2022, CareDx's former Head of Community Nephrology, Dr. Michael Olymbios, filed a complaint in California Superior Court that provided extensive detail about misconduct by the Company and its top officers, including improper bundling of expensive testing services. Following the filing of the complaint, CareDx's stock price fell $2.86 per share, or roughly 8%, to close at $32.55 per share on April 18, 2022.
Finally, on May 5, 2022, CareDx announced the Company's results for the first quarter of 2022. Among other items, CareDx reported testing service revenue that fell well short of analysts' expectations and yet another decline in average sales prices for its testing services in which the Company's average price declined by approximately 4.9% versus the last quarter of 2021, or what one analyst described as "another big deterioration in price." On this news, CareDx's stock price fell $5.97 per share, or 18.5%, to close at $25.87 per share on May 6, 2022.
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About the Firm
Labaton Sucharow LLP is one of the world's leading complex litigation firms representing clients in securities, corporate governance and shareholder rights, consumer, and cybersecurity and data privacy litigation, as well as whistleblower representation. Labaton Sucharow has been recognized for its excellence by the courts and peers, and it is consistently ranked in leading industry publications. Offices are located in New York, NY, Wilmington, DE, and Washington, D.C. More information about Labaton Sucharow is available at labaton.com.
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Contacts
David J. Schwartz
(800) 321-0476
david@labaton.com
