A Delaware lawsuit filed Nov. 22 claims SmileDirectClub was aware of regulatory hurdles threatening the company, but still sold stock at above-market prices during its initial public offering, according to Bloomberg Law.
SmileDirectClub went public Sept. 12 at $23 a share. Two weeks later, the company had sold 59 million shares, and its share price had plunged nearly 50 percent, according to the new complaint filed by an individual investor.
Six company board members sold $625 million worth of stock at $21.85 a share to a holding company they controlled, the lawsuit says, when they knew the shares were already worth much less.
The new suit is partly based on allegations from multiple federal securities suits claiming the company committed fraud and misled buyers, according to the complaint.
The plaintiff wants relief for accounting, damages, costs and fees.
SmileDirectClub has not commented on the pending litigation, according to Bloomberg Law.