NEW YORK, Aug. 30, 2016 /PRNewswire/ -- Pomerantz LLP
announces that a class action lawsuit has been filed against K12
Inc. ("K12" or the "Company") (NYSE: LRN) and certain of its
officers. The class action, filed in United States
District Court, Northern District of California, is on behalf of a class consisting
of all persons or entities who purchased or otherwise acquired K12
securities between November 7, 2013
and October 27, 2015, both dates
inclusive (the "Class Period"). This class action seeks to
recover damages against Defendants for alleged violations of the
federal securities laws under the Securities Exchange Act of 1934
(the "Exchange Act").
If you are a shareholder who purchased K12 securities during the
Class Period, you have until September 18,
2016 to ask the Court to appoint you as Lead Plaintiff for
the class. A copy of the Complaint can be obtained at
www.pomerantzlaw.com. To discuss this action, contact
Robert S. Willoughby at
rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll
free, ext. 9980. Those who inquire by e-mail are encouraged to
include their mailing address, telephone number, and number of
shares purchased.
[Click here to join this class action]
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,
Defendants made materially false and misleading statements
regarding the Company's business, operational and compliance
policies. Specifically, 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, Defendants' statements
about K12's business, operations, and prospects, were false and
misleading and/or lacked a reasonable basis.
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, in the press release, 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." Multiple
news organizations publicized the CREDO study.
On the same day, October 27,
2015, the Company issued a press release entitled "K12 Inc.
Reports First Quarter Fiscal 2016 With Revenue of $221.2 Million." Therein, the Company reported
disappointing financial results including "[r]evenues of
$221.2 million, compared to
$236.7 million in the first quarter
of FY 2015," "EBITDA . . . of negative $3.9
million, compared to $3.7
million in the first quarter of FY 2015," and an
"[o]perating loss of $20.5 million,
compared to an operating loss of $13.2
million in the first quarter of FY 2015."
On 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, on unusually heavy trading
volume.
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.
Therein, the Company disclosed that it received a subpoena from the
Attorney General of the State of
California, Bureau of Children's Justice in connection with
an investigation styled "In the Matter of the Investigation of:
ForProfit Virtual Schools."
Though the market did not immediately react to the disclosure of
the subpoena buried in the Company's Form 10-Q, K12's stock price
slid a cumulative $0.54 per share, or
5.2%, over three days from a close of $10.25 per share on October 27, 2015, to a close of $9.71 per share on October
30, 2015.
The Pomerantz Firm, with offices in New York, Chicago, Florida, and Los
Angeles, is acknowledged as one of the premier firms in the
areas of corporate, securities, and antitrust class litigation.
Founded by the late Abraham L.
Pomerantz, known as the dean of the class action bar, the
Pomerantz Firm pioneered the field of securities class actions.
Today, more than 80 years later, the Pomerantz Firm continues in
the tradition he established, fighting for the rights of the
victims of securities fraud, breaches of fiduciary duty, and
corporate misconduct. The Firm has recovered numerous
multimillion-dollar damages awards on behalf of class members. See
www.pomerantzlaw.com
CONTACT:
Robert S. Willoughby
Pomerantz LLP
rswilloughby@pomlaw.com
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SOURCE Pomerantz LLP