Teladoc Chief Financial Officer Mark Hirschhorn is stepping down from his position amid allegations that he fed stock tips to a company employee he was having an affair with.
Hirschhorn, who also served as Teladoc's chief operating officer, will resign effective Jan. 1, the company announced on Monday.
"While this was a difficult decision, it’s the right one for my family and the company," he said in a statement. "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."
“The Board and I appreciate Mark’s contributions, and we support his decision,” added Teladoc Health CEO Jason Gorevic.
Hirschhorn was named the company's CFO in 2012 and then added the COO title in 2016.
Investors filed a class-action lawsuit against the company last week following an investigative report from the Southern Investigative Reporting Foundation (SIRF) that detailed Hirschhorn's affair with a lower-level employee at the company, Charece Griffen. According to SIRF, Griffin told colleagues she and Hirschhorn liked to trade the company's stock together.
A follow-up investigation of the allegations by an outside law firm found "violations solely of our workplace relationship policy," according to the company. But a complaint filed by one investor claimed the company didn't disclose the inappropriate relationship to investors and failed to enforce its own policies prohibiting insider trading.
The company's stock dropped 6.7% following the SIRF report. Shares dropped another 4.3% in premarket trading following the news of Hirschhorn's resignation.
In a new statement issued on Monday afternoon, Teladoc offered a vigorous denial of the claims in the investor lawsuit filed last week.
"We deny the allegations contained in the lawsuit and reject any claim that we made materially false or misleading statements regarding our business, operations and compliance policies," the company said in a written statement. "When we were made aware of the allegations against Mark Hirschhorn in 2016, we engaged an outside law firm to investigate the claims. The investigation found no evidence of securities law or any other legal violations. We will respond to these claims through the legal process."
Teladoc has initiated a formal search to fill both of Hirschhorn's roles. In the interim, Teladoc Health President Peter McClennen has been appointed interim chief operating officer and senior vice president. Chief Accounting Officer and Controller Gabriel Cappucci will "coordinate all finance activity," according to the company.
“The Board and I are confident that the Teladoc Health leadership team will continue to execute on our mission and drive a high level of performance across channels and geographies," Gorevic said.
The company continues to expect full-year revenues to reach as much as $416 million and a net loss of $36 million to $38 million.
Editor's note: This article has been updated to include an additional statement from Teladoc.