Watchdog Files SEC Complaint Against Natera Inc. for Misleading Investors


Contact: Michael Clauw,, 202.780.5750

WASHINGTON, D.C. – Today, Campaign for Accountability (CfA), a nonprofit watchdog group, filed a complaint with the Securities and Exchange Commission (SEC) requesting an investigation into Natera Inc., a clinical genetic testing company. Following New York Times reporting on the company’s prenatal tests, CfA alleges that Natera appears to have misled investors about the accuracy of its prenatal genetic tests and failed to disclose the investor risk associated with tests resulting in false positives. The Times’ investigation revealed certain Natera tests could have an 85% false positive rate. After the story appeared, the company’s stock dropped to its lowest point in the past year, demonstrating this previously undisclosed investor risk. Further, Natera’s chief operating officer sold more than $800,000 worth of Natera stock in the weeks immediately prior to the story’s publication.

Read the complaint.

CfA Executive Director Michelle Kuppersmith said, “Natera repeatedly claimed – in marketing materials and earnings calls – that these tests are much more reliable than it appears they really are. Investors, insurers, and patients all have been injured by the company’s deceptive marketing.”

While the effectiveness of Natera’s Panorama test is clear when screening for more common disorders such as Down Syndrome, its accuracy in testing for rarer conditions such as Prader-Willi Syndrome and DiGeorge Syndrome is now the subject of serious criticism. A Panorama patient brochure claimed that the technology results in “fewer false positives and fewer false negatives,” but nowhere on its website does the company provide an accurate estimate of the frequency of false positives. The Times’ investigation suggests the frequency of false positives is far higher than what expectant parents might assume based on Natera’s marketing materials.

The negative impacts of false positives are myriad, including pregnant women obtaining abortions based on incorrect information, and may open the company up to lawsuits impacting shareholder value. The company has previously disclosed in investor filings that an expectant mother with a false negative test result sued, but failed to mention the comparable liability risk associated with false positives.

Additionally, in the weeks running up to the publication of the Times’ story, Natera COO Robert Allan Schueren sold approximately 10,800 shares of Natera stock valued at more than $800,000, indicating he may have traded on the knowledge that the story would have a negative impact on the company’s share price in potential violation of insider trading laws.

Ms. Kuppersmith continued, “Natera’s obfuscation about its false positives has resulted in significant confusion about the accuracy and reliability of tests marketed to vulnerable expectant parents. The SEC should investigate whether the company knowingly overstated the accuracy of its testing capabilities to the detriment of shareholders.”

Campaign for Accountability is a nonpartisan, nonprofit watchdog organization that uses research, litigation, and aggressive communications to expose misconduct and malfeasance in public life and hold those who act at the expense of the public good accountable for their actions.