According to a press release dated October 15, 2010, the complaint charges Strayer and certain of its officers and executives with violations of the Exchange Act. Strayer is a for-profit post-secondary education services corporation that offers undergraduate and graduate degree programs in business administration, accounting, information technology, education, healthcare, public administration and criminal justice at 78 physical campuses in Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, New Jersey, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, West Virginia, and Washington, D.C.
The complaint alleges that throughout the Class Period, defendants issued materially false and misleading statements regarding the Company’s business and financial results. Specifically, defendants failed to disclose that: (i) the Company had engaged in improper and deceptive recruiting and financial aid lending practices and, due to the government’s scrutiny into the for-profit education sector, the Company would be unable to continue these practices in the future; (ii) the Company failed to maintain proper internal controls; (iii) many of the Company’s programs were in jeopardy of losing their eligibility for federal financial aid; and (iv) as a result of the foregoing, defendants’ statements regarding the Company’s financial performance and expected earnings were false and misleading and lacked a reasonable basis when made.
On August 13, 2010, after the market closed, the U.S. Department of Education released data on federal student-loan repayment rates at the nation’s colleges and universities. The data showed that repayment rates were 54% at public colleges and 56% at private non-profit institutions, compared to just 36% at for-profit colleges. Specifically, the data showed that the repayment rates at Strayer were just 25%. On this news, the price of Strayer stock dropped 18.37%, or $36.75 per share, from a closing price of $200.01 per share on August 13, 2010 to a closing price of $163.26 per share on August 16, 2010, the following trading day, on a 482% increase in trading volume.
On January 31, 2011, the Court issued an Order consolidating the related cases and appointed lead plaintiff and lead counsel in this matter.
On March 17, 2011, a Consolidated Amended Complaint was filed by the lead plaintiffs against the defendants.
On April 19, 2011, the Defendants’ counsels filed a Motion to Dismiss the Consolidated Amended Complaint.
On March 20, 2012, the Court issued an Order dismissing the amended complaint and dismissing this action with prejudice.