Teladoc CFO Resigns Amid Sex Scandal

An investor class action alleges the telemedicine company failed to disclose Mark Hirschhorn's "inappropriate relationship" with a subordinate.
Matthew HellerDecember 17, 2018
Teladoc CFO Resigns Amid Sex Scandal

Mark Hirschhorn resigned as CFO of Teladoc Health amid allegations of a sex scandal and insider trading at the telemedicine company.

A news release announcing Hirschhorn’s resignation on Monday did not mention the allegations, which first surfaced on Dec. 5 in an investigative report that said he had an inappropriate sexual relationship with a subordinate and he fed stock tips to her.

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After the allegations triggered a sharp drop in Teladoc’s stock price, a shareholder filed a class action against Teladoc, CEO Jason Gorevic, and Hirschhorn last week, citing the report from the Southern Investigative Reporting Foundation (SIRF).

“While this was a difficult decision, it’s the right one for my family and the company,” Hirschhorn said in the news release. “It has been an enormous privilege to play a role in transforming how people access healthcare around the world, and I know the talented team at Teladoc Health is well positioned to continue advancing this important mission.”

Teladoc said Hirschhorn will step down effective Jan. 1 and it had begun a search to replace him, with chief accounting officer Gabriel Cappucci handling finance responsibilities in the interim.

Hirschhorn joined Teladoc, a provider of telemedicine services to health plans, health systems, and other healthcare customers, in October 2012 after serving as finance chief for technology companies including BT Radianz. In trading Monday, Teladoc shares fell 6.4% to $47.87.

“The board and I appreciate Mark’s contributions, and we support his decision,” Gorevic said.

The SIRF report focused on Hirschhorn’s relationship with Charece Griffin, an employee in Texas who joined the company in May 2014, alleging, among other things, that “after Griffin received a stock grant, Hirschhorn would tell her when he thought there were good opportunities to sell some shares.”

According to the investor lawsuit, Teladoc violated securities laws by failing to disclose the relationship and that Hirschhorn and Griffin “engaged in insider trading to provide themselves with undue benefits.”

In a statement, Teladoc denied making any false statements and said a law firm that investigated the allegations against Hirschhorn “found no evidence of securities law or any other legal violations.”

Photo: Getty Images