Hagens Berman, a law firm specializing in shareholder rights, has announced it is investigating Alignment Healthcare, Inc. (NASDAQ: ALHC) for potential securities fraud. This follows a whistleblower lawsuit filed by a former executive alleging systematic financial manipulation within the company.
Details of the Whistleblower Claims
The lawsuit was filed in a California federal court on July 7 by Hakan Kardes, the company's former Chief Transformation Officer. Kardes alleges that the company misclassified routine operating expenses, such as software maintenance and bug fixes, as capital expenditures. This practice allegedly artificially inflated the adjusted EBITDA figures for 2024 and 2025, thereby boosting key performance metrics tied to the company's stock price and executive compensation.
It is claimed that the misclassified amount for 2024 was approximately $8 million to $10 million. Kardes asserts that he reported these findings to CEO John Kao in March 2025 but subsequently faced retaliation. He states that a promised promotion was rescinded, his responsibilities were stripped, and he was ultimately forced to leave the company in the spring of 2025.
Market Impact and Company's Defense
Following the news, ALHC's stock price plunged roughly 16.7% on July 8, marking its largest single-day drop since February 2024. The share price hit an intraday low of $19.50, a sharp decline from its recent 52-week high near $25.12.
Alignment Healthcare, Inc. has firmly denied the allegations. The company stated that after Kardes raised his concerns in May 2025, the Board's Audit Committee engaged independent legal counsel and a nationally recognized accounting firm to conduct a review. This review concluded that Kardes's claims were without merit and that the company's accounting was appropriate. In a statement, Alignment Healthcare declared the allegations completely baseless, expressed its intent to vigorously defend itself, and stated its belief that it will prevail.
The investigation by Hagens Berman comes after Alignment recently reported strong financial results, with first-quarter 2026 revenue reaching $1.235 billion, a return to profitability, and an upward revision to its full-year guidance. Investors who have incurred losses holding ALHC shares may contact the law firm to inquire about their legal rights.