Teladoc Health CFO and COO Mark Hirschhorn has resigned his position as the company’s stock price continues to decline due in part to allegations against the executive of an inappropriate relationship with a subordinate and potential financial misconduct.
An investigative report from the Southern Investigative Research Foundation (SIRF) claimed that Hirschhorn had initiated a relationship with low level employee Charece Griffen and engaged with her in insider trading prohibited by the company’s internal policies.
The report led to a class action lawsuit from company shareholders alleging the company made “false and misleading statements” in Teladoc’s public financial disclosures. Hirschhorn and Teladoc Health CEO Jason Gorevic are named along with the company as defendants in the lawsuit
“We deny the allegations contained in the lawsuit and reject any claim that we made materially false or misleading statements regarding our business, operations and compliance policies,” Teladoc said in a statement.
“When we were made aware of the allegations against Mark Hirschhorn in 2016, we engaged an outside law firm to investigate the claims. The investigation found no evidence of securities law or any other legal violations. We will respond to these claims through the legal process.”
Hirschhorn started at Teladoc in 2012 as the company’s chief financial officer and added chief operating officer to his title in 2016. His resignation will be effective Jan 1 and the company is in the midst of a search to find his replacement.
“While this was a difficult decision, it’s the right one for my family and the company. It has been an enormous privilege to play a role in transforming how people access healthcare around the world, and I know the talented team at Teladoc Health is well positioned to continue advancing this important mission,” Hirschhorn said in a statement.
During the transition period, Teladoc Health President Peter McClennen will take on the role of interim chief operating officer and Chief Accounting Officer and Controller Gabriel Cappucci will coordinate the company’s finance activity, according to a press release.
“The Board and I appreciate Mark’s contributions, and we support his decision,” Gorevic said in a statement.
While Teladoc previously released a statement saying the SIRF article “contains several factual inaccuracies” and pointed to “swift and appropriate disciplinary action to address the violations,” it was not enough to stem the stock’s roughly 15 percent decline since the release of the report.