LifeStance Loses Bid to Escape Investor Suit Over IPO Statements

Increasing turnover rates among LifeStance Health Group Inc. clinicians would’ve been important to investors ahead of the mental health care provider’s 2021 initial public offering, a federal judge found in allowing a shareholder suit to continue.

Shareholders said LifeStance’s ability to retain therapists and other clinicians was an important factor in evaluating its financial performance. The lawsuit alleges LifeStance misled them by not disclosing a significant increase in resignations in the months leading up to the IPO.

Judge Jed Rakoff in the US District Court for the Southern District of New York said the plaintiffs adequately alleged that LifeStance was ...