NEW YORK, Feb. 2, 2012 (GLOBE NEWSWIRE) -- Gardy & Notis, LLP has filed a class action lawsuit in the United States District Court for the Eastern District of Virginia on behalf of purchasers of shares of common stock of K12 Inc. (NYSE:LRN) during a class period of September 9, 2009 to December 16, 2011.
The class action seeks to recover damages on behalf of plaintiff and a class of all other individual and institutional investors who purchased or otherwise acquired K12 common stock during the class period. The defendants in the case are K12, Ronald J. Packard and Harry T. Hawks. The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by concealing material information and making false and misleading statements relating to K12's business and financial condition. 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. As a result of 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.
The complaint specifically alleges that defendants misstated and/or failed to disclose that K12 had been engaging in abusive and deceptive student recruiting and flawed academic assessment practices, thereby increasing K12's student enrollment and revenues. The complaint further alleges that facts known by defendants, but concealed from the investing public, include: (i) K12 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) K12 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) K12 failed to maintain overall math and reading performance levels of its students equal to statewide grade-level performance.
If you purchased K12 common stock between September 9, 2009 and December 16, 2011, you may, no later than April 2, 2012, request that the Court appoint you as lead plaintiff for the class. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. You must meet certain legal requirements to serve as a lead plaintiff.
For more information regarding the lawsuit, or to obtain a copy of the complaint filed in the lawsuit, please contact plaintiff's counsel, Charles A. Germershausen at Gardy & Notis, LLP, 501 Fifth Avenue, New York, New York 10017, Tel: 212-905-0509, Fax: 212-905-0508, Email: cgermershausen@gardylaw.com