● Newly discovered police reports from 2016 appear to cast doubt on Teladoc’s version of events relating to the Hirschhorn affair

● Teladoc claims it acted in a “prompt” manner and promoted Hirschhorn to COO without knowledge of the affair; police reports from 2016 cast doubt on Teladoc’s timeline of events

● A related shareholder lawsuit was filed on 12/12/18 –if the lawsuit proceeds to discovery, Teladoc could face significant liability for the version of events it provided to the sell side

● In one police report, a former employee claimed she felt “harassed, stalked, and bullied” countering the company’s implied narrative that all was well in Teladoc’s Texas office

● The Board of Directors needs to immediately conduct a thorough independent investigation into the Hirschhorn affair and statements made by Gorevic in response to the SIRF story

We recently witnessed a “tale of two cities” for C-suite executives involved in alleged workplace misconduct. On the same day that Teladoc’s CEO came to the defense of the company’s CFO after an improper – and undisclosed – workplace affair surfaced, Lam Research’s CEO resigned over misconduct allegations. We are puzzled by Teladoc’s decision to stand by Hirschhorn despite his obvious judgment problems and view Teladoc’s actions to date as a sign of Hirschhorn’s “key man” status at Teladoc. Teladoc’s actions suggest to us that if Hirschhorn is ultimately forced out – something we believe remains likely in light of our recent findings –the fundamental hit to Teladoc could be significant.

We have uncovered police reports that were filed by two Teladoc employees in 2016 that suggest a) that Teladoc HR was likely aware of Hirschhorn’s affair when Hirschhorn was promoted to COO on 9/28/16, b) that Teladoc HR was aware of a targeted campaign of email harassment sent to Teladoc employees on their Teladoc corporate email addresses, c) that the targets of the email harassment believed the harassment was in some way related to the woman identified as Hirschhorn’s former mistress in the SIRF story, d) that Teladoc HR allegedly directed employees to take their grievances relating to this harassment campaign to law enforcement, and e) that at least one Teladoc employee at the time told police that Teladoc would “sweep [the affair] under the rug”. The police reports can be found here and here. We have redacted names from the police reports for privacy reasons.

These police reports are particularly troubling because Teladoc’s CEO Jason Gorevic has gone on the record with numerous sell side firms – including Credit Suisse and Leerink – claiming that Teladoc was not aware of Hirschhorn’s affair at the time of Hirschhorn’s promotion to COO and that all was well with the manager profiled in the SIRF story who allegedly filed grievances relating to Hirschhorn’s conduct. He has claimed that she left on very good terms and relocated to Boston. The very fact that the manager referenced in the SIRF story felt the need to file police reports related to her experience at Teladoc seems to seriously impeach Gorevic’s credibility when it comes to statements he made to the sell side subsequent to the SIRF’s story.

Furthermore, on Wednesday (December 12th), a shareholder lawsuit was filed in SDNY relating to the SIRF story. Assuming this case makes it to discovery, we see significant problems ahead for Teladoc as a result of the company’s public statements to date as the discovery phase is – in our view and based on our research – likely to significantly embarrass Teladoc’s executives and board of directors.

First, some background. In response to Roddy Boyd’s reporting, Teladoc issued a press release acknowledging the Hirschhorn affair yet pointing to “several factual inaccuracies” in the SIRF story without specifying exactly which points were inaccurate. Instead, Teladoc appears to have held numerous calls with sell side analysts providing point by point rebuttals with respect to SIRF’s story. In a nutshell, Teladoc (TDOC) has publicly acknowledged Hirschhorn’s affair, but has claimed a) that the insider trading accusations were investigated and found to be meritless, b) that Hirschhorn was promoted to COO prior to the affair allegations surfacing, and c) that the manager that reported Hirschhorn left on good terms. We have reviewed police reports filed by former Teladoc employees from 2016 that appear to call into question the timeline described by Teladoc management.

Below, we provide an excerpt from a Credit Suisse note that addressed the SIRF story and specifically attributed the rebuttal statements directly to TDOC’s CEO Jason Gorevic:

Source: CS note 12/6/18

We uncovered police reports from 2016 that were filed by a number of former Teladoc employees. The police reports contain details provided by former Teladoc employees that speak directly to the timeline involving Hirschhorn’s affair – and thereby, the claims that Mr. Gorevic has made in refuting SIRF’s story.

In October 2016, at least two Teladoc employees went to the Lewisville Texas police to report an anonymous cyber-harassment campaign that was directed at their Teladoc corporate email addresses. The police reports – that were drawn up in the October 2016 timeframe – do shed light on Teladoc’s timing and knowledge of Hirschhorn’s affair.

Did Teladoc HR know of Hirschhorn’s affair prior to 9/28/16 (the time of his promotion to COO)?

In one police report we found (filed 10/25/16), the complainant (at the time, a Teladoc employee) provided the following color to police officers:

We have been able to establish that the individual who filed this report was in the same division as the manager profiled in the SIRF story who allegedly blew the whistle on Hirschhorn’s affair.

In that same police report, the officer investigating the case put together the following case notes:

Readers are encouraged to review the police report in its entirety (provided earlier) which shows that the complainant specifically received a threatening email at her Teladoc corporate account – an account that Teladoc HR could have easily accessed and reviewed.

From these excerpts above, it also appears that Teladoc HR was made aware of an alleged intimidation and bullying campaign within Teladoc and that that Teladoc HR actually told their employees to take their grievances to the police.

In the reports, both employees indicate that they believe they know who was behind the harassing emails. We note that the police never confirmed the identity of the email sender but we have simply opted to provide the police reports so that readers can make their own conclusions. Most noteworthy, however, is that the complainant above (a Teladoc employee at the time) referred to an affair taking place at the company and told the interviewing officer that the company was going to “sweep this under the rug”.

The individual in question worked in the same department as Mr. Hirschhorn’s former mistress and the manager profiled in the SIRF story, and our own research – including numerous primary interviews – has confirmed that the affair alluded to in the police report above is the one involving Mr. Hirschhorn referenced by SIRF.

In a separate police report filed by the manager profiled in the SIRF story regarding Teladoc, we get a little more color regarding the timeline of events. The manager refrained from providing color on what transpired between herself and HR to the police, but did claim a) that she had raised concerns about Mr. Hirschhorn’s former mistress with HR, and b) after being transferred, the former mistress became very angry.

Therefore, we know that the manager involved in the SIRF story had taken concerns about Mr. Hirschhorn’s former mistress to HR prior to ever receiving any threatening emails. This is highly noteworthy. According to SIRF’s reporting, the manager reported the mistress to HR in October 2016. The October 2016 timing is significant – Hirschhorn was promoted to COO on September 28, 2016. Therefore, it would certainly be optically better if the manager had only reported the affair in October 2016 as it would lend credibility to Mr. Gorevic’s claim that Hirschhorn was promoted PRIOR to TDOC finding out about the affair.

However, based on our own primary research – including field interviews conducted by our investigators – and the police reports above, we can piece together that the manager involved in the SIRF story had actually voiced concerns regarding Mr. Hirschhorn’s former mistress PRIOR to October 2016 (given that the first threatening email she received was in fact on October 2, 2016).

In an interview with police, Mr. Hirschhorn’s former mistress also spoke of her transfer happening somewhere around the June or July 2016 timeframe – several months prior to Mr. Hirschhorn’s promotion to COO that occurred at the end of September 2016:

Further, despite Jason Gorevic’s claims that the manager who reported Mr. Hirschhorn’s wrongdoing left voluntarily, the emails that she provided to police below – sent to her Teladoc email address – suggests she was in fact bullied and harassed during the time she was reporting Mr. Hirschhorn’s wrongdoing:

The very fact that the manager went to the Lewisville police department – not Teladoc HR – in an attempt to resolve an issue she believed was related to her ongoing work at Teladoc speaks volumes to the environment at Teladoc.

Therefore we believe the police records demonstrate the following points:

1) Police reports (and our own corroboration through primary research) suggest that Teladoc HR was privy to Hirschhorn’s affair before September 28, 2016 (the date of his promotion to COO)

2) The environment within the Dallas office of Teladoc in the 2016 time period was sufficiently contentious that at least two employees filed police reports regarding a culture of harassment and bullying

3) One of the two employees believed Teladoc was trying to “sweep this under the rug” when discussing Hirschhorn’s affair

All told, the police reports suggest that Jason Gorevic’s claim that the company was not aware of the allegations against Hirschhorn as of his promotion on 9/28/16 is dubious at best. The suggestion that the manager who blew the whistle left on amicable terms due to a transfer to Boston is also challenged by the fact that she filed a police report over perceived harassment relating to her run-ins with HR!

In light of these findings – we believe that Teladoc’s Board of Directors should immediately order an independent investigation to evaluate Teladoc’s handling of the Hirschhorn affair and its subsequent statements. In light of the pending shareholder action, we anticipate that the discovery phase is likely to prove particularly painful for Teladoc and its Board of Directors.

Note: We sent the following questions to Teladoc prior to publishing this article and received no reply: