Alphabet (GOOGL) is being accused of illegally accessing and using the healthcare data of more than 25,000 patients through its Verily health technology subsidiary.
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Former Verily executive Ryan Sloan claims in a lawsuit that he was fired after discovering Alphabet had violated the Health Insurance Portability and Accountability Act (HIPAA) and reported his concerns to senior management.
Sloan alleges that the Verily unit used the healthcare data of tens of thousands of patients without approval and actively covered up those violations. Patient healthcare data in the U.S. is protected under HIPAA, which ensures that sensitive information cannot be disclosed without express consent.
Pending Lawsuit
Sloan’s accusations against Alphabet and Verily are contained in a lawsuit that’s been filed in federal court in San Francisco, California. The judge in the case has denied a request by Verily to dismiss the civil lawsuit or to refer the dispute to arbitration. In a news release, Verily said that the allegations made by Sloan are “completely without merit.”
Verily began life in 2015 as one of Alphabet’s many moonshot projects. Sloan was hired in 2020 to serve as the chief commercial officer of Verily’s diabetes and hypertension products. He claims to have discovered in 2022 that Verily had improperly used patients’ protected healthcare information in its research, marketing campaigns, and at various conferences.
Sloan was subsequently fired. However, an internal investigation at Verily confirmed that several HIPAA violations took place, according to the lawsuit. GOOGL stock is up 26% this year.
Is GOOGL Stock a Buy?
The stock of Alphabet has a consensus Strong Buy rating among 37 Wall Street analysts. That rating is based on 28 Buy and nine Hold recommendations issued in the last three months. The average GOOGL price target of $233.39 implies 2.26% downside from current levels.
