Teladoc Shareholder Derivative Suit Should be Tossed, Judge Says

Teladoc Health Inc. shareholders who brought a derivative suit over a former executive’s relationship with a subordinate failed to plead demand futility, so the case should be thrown out, a federal magistrate judge in New York said.

Shareholders accused the telemedicine company of failing to tell them about the ex-chief financial officer’s romantic relationship with and promotion of a subordinate. They didn’t make a required pre-suit demand on the telemedicine company’s board or explain why doing so would have been futile, a magistrate judge for the U.S. District Court for the Southern District of New York said.

The shareholders ...