LAWSUITS NEWS & LEGAL INFORMATION
Career Education Corporation CECO Securities Stock Fraud
|Company:||Career Education Corporation|
|Class Period:||Jan-1-09 to Nov-1-11|
|Lead Plaintiff Deadline:||Mar-13-12|
|Court:||Northern District of Illinois|
The complaint charges CECO and certain of its officers and directors with violations of the Securities Exchange Act of 1934. CECO operates various "for-profit" educational programs and services.
The complaint alleges that, during the Class Period, defendants issued materially false and misleading statements regarding the Company's business and prospects. Specifically, defendants misrepresented and/or failed to disclose the following: (a) that CECO was materially overstating its retention rates and employment, or "placement" rates following graduation ("Placement Rates"); (b) that the Company lacked adequate internal controls and was therefore unable to ascertain its true Placement Rates; (c) that CECO failed disclose that the Company's purported Placement Rates were achieved through an improper course of conduct and a manipulative use of the term "employment"; (d) that these Placement Rates were being reported in violation of the Company's accreditation status and therefore, in violation of their Title IV funding requirements; and (e) that, as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company and its prospects.
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. On May 24, 2011, the Company confirmed the NYAG's investigation and disclosed the existence of the Subpoena in a Form 8-K filed with the SEC. As a result of these announcements, the price of CECO common stock dropped approximately 3% from $22.39 on May 17, 2011 to $21.69 on May 25, 2011.
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 preliminary results of the investigation in Dewey & LeBoeuf LLP ("Dewey Report"), which showed that many of CECO's schools had been artificially inflating the Placement Rates reported to accreditation agencies. In reaction to these announcements, the price of CECO common stock declined 15%, from $21.87 per share to $18.51 per share.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
Career Education Corporation CECO Securities Fraud Legal HelpIf you have suffered from financial losses, you may qualify for damages or remedies that may be awarded in a possible Career Education Corporation securities class action lawsuit. Please click the link below to submit your complaint for a free evaluation.
Published on Jan-13-12
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