On November 1, 2010, the complaint charges DeVry and certain of its officers and executives with violations of the Exchange Act. DeVry is a global provider of educational services and the parent organization of Advanced Academics, Becker Professional Education, Carrington College and Carrington College California, Chamberlain College of Nursing, DeVry Brasil, DeVry University, and Ross University. Through these institutions, DeVry offers a wide array of programs in business, healthcare and technology and serves students in middle school through postsecondary education, as well as accounting and finance professionals.
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 rate at DeVry was just 38%. On this news, the price of DeVry stock dropped 8.76%, or $3.74 per share, from a closing price of $42.71 per share on August 13, 2010 to a closing price of $38.97 per share on August 16, 2010, the following trading day, on a 234% increase in trading volume.
On January 5, 2011, the Honorable John F. Grady granted the motion to appoint the Boca Raton Firefighters' and Police Pension Fund as lead plaintiff, and approved their selection of Robbins Geller Rudman & Dowd LLP as lead counsel and Wexler Wallace LLP as liaison counsel. On March 7, 2011, the lead plaintiff filed a Consolidated Class Action Complaint. The defendants filed a motion to dismiss on May 6, 2011.
On March 27, 2012, the Court issued an order granting defendants' motion to dismiss. Plaintiff was given leave to file a second amended complaint by May 4, 2012. On May 4, 2012, the plaintiffs filed an amended consolidated class action complaint. On September 21, 2012, the plaintiffs filed an amendment to their amended complaint of May 4.
On March 27, 2013, the Court issued a Memorandum Opinion granting the defendants' motion to dismiss with prejudice. On April 26, the Plaintiffs filed a Notice of Appeal of the above Opinion.