Class Period: Sep 9, 2009 to Dec 16, 2011
Lead Plaintiff Deadline: Apr 2, 2012 + Deadline passed
Summary of Case:
A securities class action has been filed against K12 Inc. ("K12" or the "Company") on behalf of all persons who purchased or otherwise acquired K12 common stock between September 09, 2009 and December 16, 2011. This case has been filed in the USDC - Virginia (Eastern).
The complaint alleges that, K12 and certain of its officers, made materially false and misleading statements and omissions during the Class Period in press releases, analyst conference calls, and filings with the United States Securities and Exchange Commission ("SEC"). The complaint alleges that during the Class Period, Defendants issued materially false and misleading statements regarding the Company's business and financial results. Specifically, Defendants misstated and/or failed to disclose that the Company had been engaging in abusive and deceptive student recruiting and flawed academic assessment practices, thereby increasing K12's student enrollment and revenues. As a result of Defendants' false statements and material omissions, K12 common stock traded at artificially inflated prices during the Class Period, reaching a high of $39.74 per share on April 29, 2011.
Then on December 12, 2011, before the market opened, The New York Times released an article (the "NYT Article") titled "Profits and Questions at Online Charter Schools" chronicling a myriad of improper practices at K12' s main virtual charter schools, including (i) high-pressure sales strategies aimed strictly at enrolling students, irrespective of the students' suitability for online education; (ii) administrative pressure to pass enrolled students, regardless of academic performance; and (iii) overall failure of K12 students to maintain grade-level performance in math and reading. Specifically, the NYT Article questioned Chief Executive Officer Ronald J. Packard's upbeat characterization of K12 students' performance on standardized tests. According to the NYT Article, Packard told investors that students at K12's Agora Cyber Charter School scored "significantly higher than a typical school on state administered tests for growth." The NYT Article indicated, however, that data had previously been released demonstrating that 42% of Agora students tested at grade level or better in math, compared with 75% of students statewide, and 52% of Agora students had hit the mark in reading, compared with 72% statewide. The NYT article also detailed issues such as high withdrawal rates; aggressive sales practices that sought to place students in K12 schools, regardless of compatibility; pressure on teachers to pass students who underperformed, or who failed to attend class; and student-to-teacher ratios of up to 270-1, despite K12's promises to parents of much lower ratios.
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.