NEW YORK, Nov. 20, 2020 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a class action lawsuit has been filed against K12, Inc. (“K12” or the “Company”) (NYSE: LRN) in the United States District Court for the Eastern District of Virginia on behalf of those who purchased or acquired the securities of K12 between April 27, 2020 to September 18, 2020, inclusive (the “Class Period”). The lawsuit seeks to recover damages for K12 investors under the federal securities laws.
The Complaint alleges that K12 made false and misleading statements and failed to disclose that: (1) K12 lacked the technological capabilities, infrastructure, and expertise to support the increased demand for virtual and blended education necessitated by the global pandemic; (2) K12 lacked adequate cyberattack protocols and protections to prevent the disabling of its computer systems; (3) K12 was unable to provide the necessary levels of administrative support and training to teachers, students, and parents; (4) and K12’s officers lacked a reasonable basis for their positive statements about the Company’s business, operations, and prospects.
On August 26, 2020, reports emerged that K12’s training for teachers in Miami-Dade County Public Schools, one of the largest school districts in the country, had been ineffective and unacceptable. On this news, K12’s shares fell by 7% over the course of two trading days, to close at $37.70 on August 27, 2020.
When classes in Miami-Dade started on August 31, 2020, K12’s platform experienced major technical issues, disruptions, and a series of cyberattacks. In response, the district’s superintendent revealed that the district had never executed its $15.3 million contract with K12. On this news, the price of K12 shares fell by 10.5% over the course of two trading days, to close at $34.89 on September 3, 2020.
A week later, facing overwhelming complaints from parents and teachers about K12’s platform and curriculum, the Miami-Dade County Public Schools Board voted to terminate their contract with K12. On this news, the price of K12 common shares once again fell drastically, by 11.5%, to close at $30.55 on September 10, 2020.
Other school districts also discovered K12’s inability to deliver on its promises. On September 17, 2020, following a loss of confidence in K12’s ability to provide educational solutions for the district, the Beaufort County School Board also voted to terminate its contract with K12. On this news, the price of K12’s shares fell 4.9%, to close at $27.21 on September 18, 2020.
Investors who purchased or otherwise acquired shares of K12 during the Class Period should contact the Firm prior to the January 19, 2021 lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at email@example.com or firstname.lastname@example.org.
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