NEW YORK, April 4, 2005 (PRIMEZONE) -- Goodkind Labaton Rudoff & Sucharow LLP has filed an amended complaint in the United States District Court for the Northern District of Illinois on behalf of persons who purchased or otherwise acquired publicly traded securities of Career Education Corporation ("Career Education" or the "Company") (Nasdaq:CECO) between January 28, 2003, and February 15, 2005. The lawsuit was filed against Career Education and John M. Larson, and Patrick K. Pesch.
The complaint alleges that Defendants violated sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder.
Specifically the complaint alleges that certain of the defendants' public statements were false or contained material omissions in terms of their financial and business results. As a result, the company historically was publicized as "never missing," and usually surpassing, analysts' projections of its operations. The allegations include that revenue and earnings were overstated, and the Company's bad debt ratio was understated. Individual defendants named in the allegations sold their personally held CEC stock at artificially inflated prices, reaping aggregate proceeds of more than $46 million. A copy of the complaint is available online at http://www.glrslaw.com/index.cfm/hurl/SectionID=96/getGlobalID=23827 and includes information about the 26 witnesses that have stepped forward.
CEC recently announced that it would (i) restate its previously reported financial results for 2000 through 2004 to reduce revenues and earnings for these periods; and (ii) that it would take a $19 million charge in the 2004 fourth quarter to increase its estimate of its allowance for doubtful accounts. On this news, the price of CEC stock fell, from a closing price on February 15, 2005, of $39.21, to close at $37.19 on February 16, 2005. The stock continued to fall as analysts became further aware of the extent of the Company's problems, closing on March 15, 2005, at $32.74 per share.
Lead Plaintiff is represented by Goodkind Labaton Rudoff & Sucharow LLP, one of the country's premier national law firms that represent individual and institutional investors in class action, complex securities and corporate governance litigation. The firm has been a champion of investor rights for over 40 years and has been recognized for its reputation for excellence by the courts. Goodkind Labaton was recently ranked fourth in total recoveries in 2003 among the top 50 plaintiffs' law firms by Institutional Shareholder Services (ISS), the world's leading provider of proxy and corporate governance services. Notably, Goodkind Labaton recovered over half a billion dollars for its clients in the last two years.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.