The investigation centers on a lawsuit filed by Hakan Kardes, who served as Alignment’s chief transformation officer from 2019 to 2025. Kardes alleges that the company engaged in deliberate accounting irregularities to bolster its adjusted EBITDA, a move that purportedly influenced both executive compensation packages and the company's market valuation. These accusations surface just as Alignment had reported a strong first quarter in 2026, which initially pushed share prices toward 52-week highs.

Reed Kathrein, the partner at Hagens Berman spearheading the inquiry, stated the firm is examining whether Alignment misled investors through false disclosures regarding its internal financial controls. The investigation specifically targets the potential for securities law violations that left shareholders with substantial losses. Current efforts are focused on gathering evidence from investors and individuals with non-public information, with the firm noting the availability of SEC whistleblower incentives for those providing original data.