According to the complaint, K12 is a technology-based education company that purportedly provides technology-based educational products and solutions to public school districts, public schools, virtual charter schools, private schools, and families.
The complaint alleges that throughout the Class Period, the defendants made false and/or misleading statements and/or failed to disclose: (1) that K12 was publishing misleading advertisements about students’ academic progress, parent satisfaction, their graduates’ eligibility for University of California and California State University admission, class sizes, the individualized and flexible nature of K12’s instruction, hidden costs, and the quality of the materials provided to students; (2) that K12 submitted inflated student attendance numbers to the California Department of Education in order to collect additional funding; (3) that, as a result of the aforementioned practices, the company was open to potential civil and criminal liability; (4) that the company would likely be forced to end these practices, which would have a negative impact on K12’s operations and prospects, and/or that K12 was, in fact, ending the practices; and (5) that, as a result of the foregoing, the defendants’ statements about K12’s business, operations, and prospects, were false and misleading and/or lacked a reasonable basis.
The complaint alleges that on October 27, 2015, Stanford’s Center for Research on Education Outcomes (“CREDO”) published a study regarding online charter schools, specifically mentioning K12. CREDO also published a press release in conjunction with the study, summarizing the results of the study. CREDO stated: “Innovative new research suggests that students of online charter schools had significantly weaker academic performance in math and reading, compared with their counterparts in conventional schools.” Following this news, K12’s stock price fell $1.93 per share, or 15.8%, to close at $10.25 per share on October 27, 2015.
The complaint further alleges that after the market closed on October 27, 2015, K12 filed its Form 10-Q with the SEC for the fiscal quarter ended September 30, 2015, disclosing that it received a subpoena from the Attorney General of the California, Bureau of Children’s Justice in connection with an investigation styled “In the Matter of the Investigation of: For- Profit Virtual Schools.” Following this news, K12’s stock price slid a cumulative $0.54 per share, or 5.2%, over three days from $10.25 per share on October 27, 2015, to $9.71 per share on October 30, 2015.
If you are a member of the class described above, you may no later than September 19, 2016, move the Court to serve as lead plaintiff of the class, if you so choose.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of their choice, or may choose to do nothing and remain an inactive class member.
Kessler Topaz Meltzer & Check, LLP has not filed a complaint in this matter. If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at firstname.lastname@example.org.
Kessler Topaz Meltzer & Check, LLP
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