Apollo Group Inc. - Securities Class Action

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Copyright (c) 2001
Stanford Law School

Apollo Group Inc. Summary: The complaint alleges that during the Class Period, the Company and certain of its officer and/or director violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by making materially false and misleading statements to artificially inflate the value of Apollo stock. Specifically, it is alleged that throughout the Class Period, the defendants represented to the Class that it issued stock options to management in accordance with all applicable laws and rules while, in fact, it "backdated" options granted to all levels of management. On June 9, 2006, in the midst of a nation-wide options scandal in connection with the backdating of options, Apollo announced that it had performed a review of its stock option practices during fiscal 2000-2004 and initially concluded that it had "complied with all applicable laws," and it would hire an outside firm to review those conclusions. The Company flatly denied that it had backdated options. These statements were false and misleading when made because the defendants failed to disclose or indicate that they knew that the option grant process was deficient and could cause the Company to restate its financial statements.

The Company shocked the investing public when, on October 18, 2006, it disclosed that on June 23, 2006 the Company's Board of Directors appointed a special committee of two independent Board members to oversee the investigation of Apollo's stock option grant practices. Further, it was disclosed that the independent outside counsel retained by the special committee had themselves engaged independent accounting advisors to assist in the investigation. In addition, the Company for the first time disclosed that "[v]arious deficiencies in the process of granting and documenting stock options have been identified to date." Finally, and most unfortunately for Apollo shareholders, the Company disclosed for the first time that "[t]he accounting impact of these matters has not been quantified. There can be no assurance that the results of the investigation will not require a possible restatement of the Company's financial statements when the potential errors are quantified and assessed."

The complaint alleges that the market reacted quickly to these announcements. Apollo's stock price plummeted to $37.55 per share from its prior day close of $48.68 per share, a 22.86% drop in one day, on massive volume of 28,738,800 shares, more than fifteen times more than the prior day's volume.

According to an article dated November 15, 2007, on September 11, 2007, the U.S. District Court for the District of Arizona appointed the institutional investor with the largest financial interest in a securities fraud class action as the lead plaintiff. … The district court found that the Operating Engineers had the largest financial interest in the case and was presumed to be the most adequate plaintiff.

On November 23, 2007, the Lead Plaintiff filed an Amended Complaint. Defendants filed motions to dismiss on January 22, 2008. The judge denied Apollo's motion in part and dismissed several individual defendants on March 31, 2009. After quickly filing a motion for reconsideration, plaintiffs filed a Second Amended Complaint on April 30, 2009, addressing deficiencies in allegations against all defendants. On June 15, 2009, the defendants filed motions to dismiss the Second Amended Complaint. On February 22, 2010, the lead plaintiff's motion for reconsideration was granted in part and denied in part.

According to the Order signed by Judge Robert C. Broomfield on March 31, 2011, the defendant's motion to dismiss the Second Amended Complaint is granted. The Second Amended Complaint is dismissed with prejudice, and the Clerk's Judgment was entered the next day in favor of defendants and against plaintiff.

INDUSTRY CLASSIFICATION:
SIC Code: 8200
Sector: Services
Industry: Schools

COMPANY/ISSUER NAME:	Apollo Group Inc.
COMPANY/ISSUER TICKER:	APOL
COMPANY WEBSITE:	http://www.apollogrp.edu

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

International Brotherhood of Teamsters Local 617 Pension and Welfare Funds, et al. v. Apollo Group Inc., et al.

COURT: D. Arizona	DOCKET NUMBER: 06-CV-2674
JUDGE NAME: Hon. Robert C. Broomfield
DATE FILED: 11/02/2006	SOURCE: Notice of Filing
CLASS PERIOD START: 11/28/2001	CLASS PERIOD END: 10/18/2006
TYPE OF COMPLAINT: Complaint (Unamended and Unconsolidated)
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Dyer & Butler, LLP 2800 North Central Avenue, Suite 100 , Phoenix, AR, 85004 (voice) 602.288.0588, (fax) 602.288.0588, Schoengold Sporn Laitman & Lometti PC 19 Fulton Street, Suite 406, New York, NY, 10038 (voice) 212.964.0046, (fax) 212.267-8137, shareholderrelations@spornlaw.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 2

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Class Action Complaint - Jury Trial Demanded
Type: Complaint		Date on the document: 11/02/2006
Order
Type: Order		Date on the document: 09/11/2007

REFERENCE COMPLAINT

International Brotherhood of Teamsters Local 617 Pension and Welfare Funds, et al. v. Apollo Group, Inc., et al.

COURT: D. Arizona	DOCKET NUMBER: 06-CV-2674
JUDGE NAME: Hon. Robert C Broomfield
DATE FILED: 04/30/2009	SOURCE: Docket
CLASS PERIOD START: 11/28/2001	CLASS PERIOD END: 10/18/2006
TYPE OF COMPLAINT: Second Amended
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Coughlin Stoia Geller Rudman & Robbins LLP (San Francisco) 100 Pine Street, Suite 2600, San Francisco, CA, 94111 (voice) 415.288.4545, (fax) 415.288.4534, _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 1

DOCUMENTS FOR THE REFERENCE COMPLAINT
Lead Plaintiff's Complaint For Violations Of The Federal Securities Laws
Type: Complaint		Date on the document: 11/23/2007
Judgment
Type: Order		Date on the document: 03/31/2009
Lead Plaintiff's Second Amended Complaint For Violations Of The Federal Securities Laws
Type: Complaint		Date on the document: 04/30/2009
U.S. District Court Civil Docket
Type: Docket		Date on the document: 08/24/2009
Order
Type: Order		Date on the document: 02/22/2010
Judgment In A Civil Case
Type: Other		Date on the document: 03/31/2011
Order
Type: Order		Date on the document: 03/31/2011
U.S. District Court Civil Docket
Type: Docket		Date on the document: 03/31/2011
Judgment
Type: Other		Date on the document: 04/06/2011

OTHER DOCUMENTS

Case Name and/or Number:
Type:		Date on the document:

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