CareDx, Inc. Securities Lawsuit Investigation
Shares drop 27% following disclosure of two federal investigations
On Thursday, October 28th, 2021, precision medical company CareDx (NASDAQ: CDNA) admitted in a quarterly SEC filing that it is being investigated by the United States Department of Justice (DOJ) and the Security and Exchange Commission (SEC). According to the filing, the DOJ investigation concerns business practices related to the company’s kidney testing and phlebotomy services, and the SEC is investigating the same issues identified by the DOJ, as well as certain accounting and reporting practices.
Following this news, CareDx, Inc. stock dropped over 27% on Friday, October 29, 2021, causing significant harm to investors.
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CareDx Under Investigation by Both the DOJ and the SEC
CareDx is a precision medical company that provides testing services, products, and digital solutions pre- and post- transplant surgery. On Thursday, October 28, 2021, the company disclosed in an SEC 10-Q filing that it is the target of a False Claims Act investigation by the U.S. Department of Justice (DOJ). According to the filing, the DOJ issued a civil investigative demand (CID) requesting documents in connection with the investigation, which concerns “certain business practices related to our kidney testing and phlebotomy services.” The filing states that CareDx also received a subpoena from the Securities and Exchange Commission (SEC) requesting documents related to the concerns expressed in the CID, as well as CareDx’s accounting and public reporting practices.
The 10-Q filing also states that a third unnamed state regulatory agency has made an additional information request, and that depending on the outcome of the multiple investigations and information requests, the company may have to:
“expend significant financial and managerial resources in connection with responding to the CID, the SEC subpoena and other information requests, [which could] seriously harm our business and our financial results”
Following this news, CareDx’s stock dropped 27% in intraday trading on Friday, October, 29, 2021, causing significant harm to investors. If you invested in CareDx stock, you may have a legal claim. Contact our securities lawyers for a free and confidential consultation.
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