Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

FTC launches probe into mental-health startup Cerebral - WSJ

Published 06/14/2022, 05:48 PM
Updated 06/14/2022, 06:35 PM
© Reuters. FILE PHOTO: Signage is seen at the Federal Trade Commission headquarters in Washington, D.C., U.S., August 29, 2020. REUTERS/Andrew Kelly/File Photo

(Reuters) -The U.S. Federal Trade Commission (FTC) has begun an investigation into SoftBank-backed mental-health startup Cerebral Inc, the Wall Street Journal reported on Tuesday, citing a letter the antitrust body sent to the company.

In the letter dated June 1, the FTC said it was investigating whether the company engaged in deceptive or unfair practices related to advertising or marketing of mental-health services, according to the WSJ report

The letter asked Cerebral to preserve documents and also sought information related to programs where the company continues to bill customers a subscription fee until the customer cancels, the report said.

Cerebral declined to confirm the FTC probe but said it is cooperating with the antitrust body.

The FTC was not immediately available for comment.

The company said in December it had raised $300 million in a funding round led by SoftBank Vision Fund 2, lifting its valuation four-fold to $4.8 billion in less than six months after its last capital raise.

Cerebral provides mental health services, including consultation and prescription of medicines, through its telehealth platform.

© Reuters. FILE PHOTO: Signage is seen at the Federal Trade Commission headquarters in Washington, D.C., U.S., August 29, 2020. REUTERS/Andrew Kelly/File Photo

Telehealth platforms' prescriptions have been under scrutiny, with Walmart (NYSE:WMT) Inc and CVS Health Corp (NYSE:CVS) last month saying they would stop filling prescriptions for controlled substances issued by telehealth startups Cerebral Inc and Done Health.

The WSJ last month reported that Cerebral had been issued a subpoena by federal prosecutors as part of an investigation into possible violations of the Controlled Substances Act.

Latest comments

so basically a friend to the FTC is launching a similar business model so the smear campaign starts.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.