SmileDirectClub (SDC -8.4%) slips on average volume on the heels of a Reuters report that top dentist and chief clinical officer Jeffrey Sulitzer may lose his California license following a two-year investigation by the state dental board.
In a 24-page complaint by the state AG’s office, Dr. Sulitzer is accused of violating state law, defrauding state dental regulators and acting with gross negligence toward patients while helping the company grow its business. The document cites nine causes for discipline, including his application to operate SDC-controlled dental offices in California and assuming liability for services. SDC is not licensed to practice dentistry in the state and requires customers to sign liability waivers before receiving treatment. The AG accuses him of “aiding and abetting” SDC and seeks the revocation or suspension of his license.
SDC outside counsel J. Erik Connolly claims that California Dental Board members are using the disciplinary process to retaliate against SDC and Sulitzer’s lawsuit filed last year over an alleged illegal investigation and anti-competitive campaign against the company.
The company has been tussling with California authorities for some time. In October 2019, state lawmakers passed a bill requiring practitioners to review a patient’s dental x-rays before prescribing orthodontic treatment with aligners, a move the company says was a tactic by the dental lobby to stiff-arm competition.
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