CASES
Corinthian Colleges, Inc. (2010)
Class Period: Oct 30, 2007 to Aug 19, 2010
Summary of Case:
A securities class action has been filed against Corinthian Colleges, Inc. (2010) (COCO) (the "Company") on behalf of all securities purchasers from October 30, 2007 through August 19, 2010, inclusive ("Class Period"), in the United States District Court for the Central District of California.
The complaint alleges that throughout the Class Period, defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and prospects. Specifically, the complaint alleges that the Company made false and/or misleading statements and/or failed to disclose: (1) the Company overstated its growth prospects by engaging in illicit and improper recruiting activities, which also had the effect of artificially inflating the Company's reported results and future growth prospects; (2) the Company's financial results were overstated in that the Company's colleges inflated tuition costs and its student loan repayment rates were well below levels required for participation in federal loan programs; (3) the Company failed to maintain adequate systems of internal operational or financial controls; and (4) based on the foregoing, defendants lacked a basis for their positive statements about the Company, its prospects and growth.
The complaint further alleges that on August 3, 2010, the U.S. General Accounting Office issued a report that concluded that for-profit educational institutions such as Corinthian had engaged in an illegal and fraudulent course of action designed to recruit students and overcharge the federal government for the cost of such education. Thereafter, a Congressional Committee launched an investigation of such practices; the U.S. Department of Education released data showing that the loan repayment rates for Corinthian enrollees were well below the level required for federal loan program eligibility; and the Company disclosed that its enrollee default rates had significantly increased, and were continuing to do so.
If you purchased this company's shares during the Class Period and suffered a loss or for further information about the case, please review the links below.