Shareholder Class Action Filed Against Career Education Corporation By The Law Firm of Schiffrin & Barroway, LLP
December 11 2003 - 7:02PM
PR Newswire (US)
Shareholder Class Action Filed Against Career Education Corporation
By The Law Firm of Schiffrin & Barroway, LLP BALA CYNWYD, Pa.,
Dec. 11 /PRNewswire/ -- The following statement was issued today by
the law firm of Schiffrin & Barroway, LLP: Notice is hereby
given that a class action lawsuit was filed in the United States
District Court for the Northern District of Illinois on behalf of
all purchasers of the common stock of Career Education Corporation
("Career Education" or the "Company") (NASDAQ:CECO) from January
28, 2003 through December 2, 2003, inclusive (the "Class Period").
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 Schiffrin & Barroway, LLP (Marc A.
Topaz, Esq. or Stuart L. Berman, Esq.) toll free at 1-888-299-7706
or 1-610-667-7706, or via e-mail at . The complaint charges Career
Education, John M. Larson, Patrick K. Pesch with violations
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934,
and Rule 10b-5 promulgated thereunder. More specifically, the
complaint alleges that the defendants' statements made during the
Class Period were materially false and misleading because they
failed to disclose and/or misrepresented the following adverse
facts, among others: (1) that the Company's "record" financial
growth was a product of inflated student enrollment, retention, and
graduation rates procured through the falsification of such
records; (2) that student records were falsified in order to show a
higher rate of enrollment, student retention, and graduation so
that the Company would qualify for state and federal funding; (3)
that Company, in order to procure its "record" financial results,
forced its employees to falsify student records; and (4) that the
Company's earning and net income were materially inflated and in
violation of Generally Accepted Accounting Principles ("GAAP")
because the Company's financial results were derived from the
defendants' illegal practices. The truth behind the Company's
"record" growth during the Class Period began to emerge on November
11, 2003 when The Record, a Bergen County, New Jersey newspaper,
reported that a former director of Gibbs College, a school owned by
the defendants, had filed a lawsuit against the Company. The former
director accused the Company of falsifying student records in order
to show a high rate of student retention and graduation, and to
qualify for state and federal funding. On news of this, the
Company's stock fell more than 13% or $7.10 per share on November
17, 2003 to close at $45.81. Similarly on December 3, 2003, The
Santa Barbara News-Press reported that another former employee at a
school owned by the defendants had filed another lawsuit wherein
she claimed that "officials at the school acted illegally and
improperly to inflate enrollment and boost the bottom line." The
former employee also alleged that "[m]any staff members have been
asked by management to commit forgery, fraud, perjury or whatever
else is necessary to pass audit inspections." On news of this,
shares of Career Education fell nearly 28% or $15.28 per share to
close at $39.48 per share on December 3, 2003. Plaintiff seeks to
recover damages on behalf of class members and is represented by
the law firm of Schiffrin & Barroway, which prosecutes class
actions in both state and federal courts throughout the country.
Schiffrin & Barroway is a driving force behind corporate
governance reform, and has recovered in excess of a billion dollars
on behalf of institutional and high net worth individual investors.
For more information about Schiffrin & Barroway, or to sign up
to participate in this action online, please visit
http://www.sbclasslaw.com/. If you are a member of the class
described above, you may, not later than February 9, 2004, move the
Court to serve as lead plaintiff of the class, if you so choose. In
order to serve as lead plaintiff, however, you must meet certain
legal requirements. You may retain Schiffrin & Barroway, or
other counsel of your choice, to serve as your counsel in this
action. CONTACT: Schiffrin & Barroway, LLP Marc A. Topaz, Esq.
Stuart L. Berman, Esq. Three Bala Plaza East, Suite 400, Bala
Cynwyd, PA 19004 1-888-299-7706 (toll-free) or 1-610-667-7706 Or by
e-mail at DATASOURCE: Schiffrin & Barroway, LLP CONTACT: Marc
A. Topaz, Esq. or Stuart L. Berman, Esq. of Schiffrin &
Barroway, LLP, +1-888-299-7706, or +1-610-667-7706, Web site:
http://www.sbclasslaw.com/
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