The Bragar Eagel & Squire law firm is investigating whether Dentsply Sirona's board of directors breached their fiduciary duties to the company.
Six things to know:
- The law firm is investigating claims on behalf of long-term stockholders following a class-action complaint filed in May 2022 with a class period from June 9, 2021, to May 9, 2022.
- The claim alleges that the defendants inflated the dental supplier's earnings by manipulating its accounting so senior executives could be eligible for cash and stock-based incentive compensation as part of a distributor rebate program, according to a May 11 news release.
- The investigation follows another by Kahn Swick & Foti launched in February for possible breaches of fiduciary duties. The Bernstein Liebhard law firm also launched an investigation into possible federal securities law violations in May 2022.
- Dentsply Sirona launched an internal investigation into possible securities fraud in March 2022.
- The company replaced several key leadership roles during its investigation, including its CEO, CFO and executive vice president, chief accounting officer and senior vice president, and chief commercial officer.
- The investigation was completed in November, with the company stating it identified "weaknesses in the company's internal control over financial reporting" and determined its financial statements and related disclosures for the months leading up to Sept. 30, 2021, and for the 2021 fiscal year are unreliable because of "certain misstatements contained in those financial statements."
Becker's contacted Dentsply Sirona for comment and was sent this statement:
"Dentsply Sirona announced back in November 2022 the completion of the previously disclosed internal investigation into certain financial reporting matters. The investigation was undertaken by the Audit and Finance Committee of the Dentsply Sirona Board of Directors. Its findings and the actions the Company has been taking to address these findings and certain related financial reporting matters are available in the company filings. The Company has already taken decisive and meaningful steps to address the findings and implemented enhancements and remedial measures. With a management team that is committed to accountability, operational rigor and integrity, coupled with the remedial measures, the entire Dentsply Sirona organization is focused on delivering long-term growth and value creation. It is not uncommon to see lawsuits of these types in such situations and after undergoing an investigation."