NEW YORK, Jan. 31, 2012 /PRNewswire/ -- Faruqi & Faruqi, LLP today announced that it has filed a securities class action lawsuit against K12, Inc. ("K12" or the "Company") (NYSE: LRN) and certain of its senior executives. The action (No. 1:12-cv-00103-CMH-IDD), filed in the United States District Court for the Eastern District of Virginia, asserts claims under the Securities Exchange Act of 1934 ("Exchange Act") on behalf of investors in K12 common stock during the period between September 9, 2009 and December 16, 2011, inclusive (the "Class Period").
A copy of the complaint can be viewed on the firm's website at www.faruqilaw.com/LRN.
K12 and certain of its senior executives are charged with issuing a series of materially false and misleading statements in violation of Section 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder. Specifically, on December 12, 2011, The New York Times released an 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. On this news, the price of K12 stock dropped 34.4%, or $9.89 per share, from a closing price of $28.79 on December 12, 2011, to a closing price of $18.90 per share on December 16, 2011, on unusually heavy trading volume.
The true facts known by the defendants but concealed from the investing public during the Class Period, were that (i) the Company misstated and failed to disclose that it had engaged in improper and deceptive recruiting and sales strategies, aimed strictly at enrolling students regardless of the students' ability to successfully complete the curriculum; (ii) the Company misstated and failed to disclose the administrative pressure from upper management levels to pass students despite poor (or nonexistent) academic performance, so as to maintain high enrollment levels and in turn continued government payments; and (iii) the Company's failure to maintain overall math and reading performance levels of its students equal to statewide grade-level performance. As a result, the Complaint alleges that K12 violated provisions of the Exchange Act during the Class Period by issuing false and misleading press releases, financial statements, filings with the Securities and Exchange Commission and statements during investor conference calls.
Plaintiff now seeks to recover damages on behalf of himself and all other investors who purchased or acquired K12 common stock during the Class Period, excluding defendants and their affiliates. Plaintiff is represented by Faruqi & Faruqi, LLP, a national securities law firm with extensive experience in prosecuting class actions involving corporate fraud.
If you wish to serve as lead plaintiff for the proposed class in this action, you must file a motion with the Court no later than 60 days from today. Any member of the proposed class may move the Court to serve as lead plaintiff, or may choose to do nothing and remain a member of the proposed class.
If you purchased K12 common stock during the Class Period and wish to obtain information concerning joining this action, you can do so under the "Join Lawsuit" section of our website or by clicking: http://www.faruqilaw.com/LRN. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, you can also contact us by calling Richard Gonnello or Francis McConville toll free at 877-247-4292 or at 212-983-9330 or by sending an e-mail to email@example.com or firstname.lastname@example.org.
FARUQI & FARUQI, LLP
369 Lexington Avenue, 10th Floor
New York, NY 10017
Attn: Richard Gonnello, Esq.
Francis McConville, Esq.
Telephone: (877) 247-4292 or (212) 983-9330
SOURCE Faruqi & Faruqi, LLP