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Ex-Cerebral VP Alleges Unethical Prescription Practices in Suit

April 28, 2022, 12:49 AM

A former Cerebral Inc. executive claims the San Francisco-based mental telehealth company fired him after he complained about unethical practices including alleged plans to prescribe stimulants to 100% of ADHD patients as a retention strategy.

In a lawsuit filed Wednesday in California state court, Matthew Truebe said he was hired as Cerebral’s vice president, product and engineering in Feb. 2021, and alleges he was fired a year later in retaliation for objecting to the company’s plans to “egregiously put profits and growth before patient safety.”

Truebe raised several concerns to Cerebral leadership during his time at the company, including the existence of over 2,000 duplicate shipping addresses in the patient database, suggesting customers were setting up multiple accounts to obtain additional medication, according to the complaint in San Francisco Superior Court.

Truebe says he reported the findings to Cerebral’s CEO and was told the issue was his “lowest priority.” Leadership also failed to take action when Truebe reported that tens of thousands of confidential patient records had been compromised in a security breach, the complaint alleges.

Cerebral failed to adequately address patient safety issues like overdoses, and when the company determined that patients who were prescribed stimulants were more likely to remain customers, its chief medical officer told employees that their goal should be to prescribe stimulants to all ADHD patients, Truebe says.

The former VP says the company retaliated against him for his opposition to unlawful practices by ordering him to sign an amendment to his employment agreement that would have retroactively cut his stock options in half and prohibited him from talking about the practices he had witnessed.

Truebe says that when he refused to sign the amendment the CEO threatened to give him a negative performance evaluation and fire him, which he did, one day before Truebe’s stock options had vested.

Cerebral made headlines in Oct. 2021 when Olympic gymnast Simone Biles was announced as the company’s chief impact officer. In December 2021, Cerebral was valued at $4.8 billion, following a $300 million investment round led by Japanese investor SoftBank.

Causes of Action: California Labor Code, wrongful discharge, Business and Professions Code; breach of written contract; breach of the implied covenant of good faith and fair dealing; promissory fraud.

Relief: Economic damages; non economic damages; lost wages; equitable relief; injunctive relief; declaratory relief; disgorgement; interest; attorneys’ fees; costs.

Response: “The allegations in the complaint are not true, and the Company denies them in all respects,” a Cerebral spokesperson told Bloomberg Law. “We plan to vigorously defend ourselves against these false and unfounded allegations.”

Attorneys: Minnis & Smallets LLP represents Truebe.

The case is Truebe v. Cerebral Inc., Cal. Super. Ct., No. CGC22599376, 4/27/22.

To contact the reporter on this story: Maeve Allsup in San Francisco at mallsup@bloomberglaw.com

To contact the editor responsible for this story: Meghashyam Mali at mmali@bloombergindustry.com