A class-action lawsuit has been filed against Align Technology claiming the company made misleading statements that violated the Securities Exchange Act, according to a March 2 press release.
In the complaint filed by the law firm Robbins Geller Rudman & Dowd, investors claim that between April 24, 2019, and July 24, 2019, Align Technology made false statements that emphasized the company's growth in China. Align Technology allegedly described its Chinese operations as a "huge market opportunity" with "tremendous growth."
As a result of Align Technology's statements on its performance in China, its common stock inflated to more than $330 per share during the time frame mentioned above, according to the lawsuit.
However, when the market closed on July 24, 2019, Align Technology reported declining sales volumes for the second quarter of that year. Align Technology CEO said the issues were "primarily due to softness in China related to a tougher consumer environment."
After Align Technology released its earnings report, the company's stock declined more than 27 percent, closing at $275.16.