CASES
Career Education Corporation
Class Period: Jan 1, 2009 to Nov 1, 2011
Lead Plaintiff Deadline: Mar 13, 2012
Summary of Case:
A securities class action has been filed against Career Education Corporation ("CECO" or the "Company") on behalf of all who purchased or otherwise acquired CECO common stock between January 1, 2009 and November 1, 2011 (the "Class Period"). This case has been filed in the USDC - Illinois (Northern).
The complaint alleges that during the Class Period, CECO was consistently misleading investors about job placement data for graduates of CECO's schools, which are material facts, in its public disclosures.
CECO purports to provide various "for-profit" educational programs and services. Throughout the Class Period, Defendants represented that CECO's retention rates and employment, or "placement" rates following graduation ("Placement Rates") were higher than they actually were. The positive statements regarding the Placement Rates made by defendants were materially false and misleading when made, were known by defendants to be false or were recklessly disregarded because the defendants failed to disclose that the Company's purported Placement Rates were achieved through an improper course of conduct and a manipulative use of the term "employment."
On May 17, 2011, CECO announced that it had received a subpoena from the Attorney General of the State of New York (the "NYAG"). The subpoena requested documents pertaining to student employment outcomes and Placement Rates of graduates, among other items, in connection with the NYAG's investigation into whether the Company and certain of its schools complied with certain New York state consumer protection, securities, finance and other laws.
Purportedly in connection with the NYAG's investigation, on August 3, 2011, the Company reported that it had retained outside counsel (subsequently identified as Dewey & LeBoeuf LLP) to conduct an internal investigation to determine if the Placement Rates that CECO was reporting to various accreditation agencies were accurate. On November 1, 2011, the Company released the preliminary results of the investigation by Dewey & LeBoeuf LLP ("Dewey Report"), which showed that many of CECO's schools had been artificially inflating the Placement Rates reported to accreditation agencies.
The Complaint alleges that during the Class Period, the Company reported inflated and false Placement Rates to ACICS, ACCSC and its other accrediting agencies, andthus misled its investors as to the health and condition of the Company, in particular its ability to continue to receive Title IV Funding.
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.