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XRAY.US
id: 2260

Dentsply Sirona (XRAY) Executive Compensation and Revenue Recognition Case

Attorneys review the case details to decide whether to proceed with a class action.
S.D. New York
Court
1:22-cv-06339
Case number
06/09/2021
Class period Start
11/13/2022
Class period End

  • $XRAY investors filed a claim against Dentsply Sirona Inc., its CEO, and its CFO for touting strong financial performance and effective internal controls, while failing to disclose that the Company was engaged in channel stuffing and improper revenue recognition practices that inflated reported results.

  • After Dentsply Sirona terminated CEO Donald M. Casey Jr. on April 19, 2022, the Company's stock fell 13%, and fell a further 7% on May 10, 2022 after Dentsply disclosed an Audit Committee investigation into its accounting practices.

  • $XRAY investors can join this case to be notified about potential recovery.

Case Details:

Dentsply Sirona is a global manufacturer of dental and medical device products. Throughout the Class Period, Defendants represented that the Company's financial results reflected legitimate, sustainable revenue growth and that Dentsply maintained effective internal controls over financial reporting, while its executive compensation program was tied to metrics management touted as strong indicators of performance.

The Company was allegedly engaged in channel stuffing, pushing excess inventory onto distributors to prematurely recognize revenue and inflate reported results, and its internal controls were materially deficient in ways that allowed this practice to continue undetected.

On April 19, 2022, Dentsply Sirona announced the termination of CEO Donald M. Casey Jr., without immediate explanation. On this news, the Company's stock fell 13% to $42.20 per share.

On May 10, 2022, Dentsply disclosed that its Audit Committee had launched an internal investigation into the Company's accounting and revenue recognition practices. On this news, the stock fell a further 7% to $36.38 per share.

Based on these events, $XRAY investors filed a claim against Dentsply Sirona Inc., alleging the Company:

  • Engaged in channel stuffing to artificially inflate reported revenue

  • Maintained materially deficient internal controls over financial reporting

  • Tied executive compensation to metrics inflated by these practices

  • Lacked a reasonable basis for its positive statements about financial performance and controls

Investors argue that had the truth about Dentsply's revenue recognition practices and internal control deficiencies been disclosed earlier, the Company's stock would not have traded at artificially inflated prices.

Case Type
US Securities Class Action
Case Status
Attorney Investigation
Alleged Offence
Misleading Statements, 
Failure to Disclose
Suspected Party
Directors, 
Management
Security Type
Stocks
Trade Direction
Long
Shock Event Date
05/10/2022
Filing date
07/26/2022