BENSALEM, Pa.--(BUSINESS WIRE)--Law Offices of Howard G. Smith announces that a class action lawsuit has been filed in the United States District Court for the Southern District of California on behalf of purchasers of the securities of Bridgepoint Education, Inc. (“Bridgepoint” or the “Company”) (NYSE:BPI) between August 7, 2012 and May 30, 2014, inclusive (the “Class Period”). Bridgepoint is a for-profit provider of postsecondary education services through online and traditional campuses.
The lawsuit alleges that defendants made false and/or misleading statements and/or failed to disclose to investors that: (1) the Company had applied an improper revenue recognition methodology to assess collectability of funds owed by students; (2) as a result, the Company’s revenues and financial results were overstated; (3) the Company’s financial statements were not prepared in accordance with Generally Accepted Accounting Principles; (4) the Company lacked adequate internal and financial controls; and (5), as a result of the foregoing, the Company’s financial statements were materially false and misleading at all relevant times.
On May 12, 2014, Bridgepoint revealed that it was unable to timely file its Quarterly Report for its 2014 fiscal first quarter because the Securities and Exchange Commission (“SEC”) had informed the Company that a reassessment of its revenue recognition policy was necessary. According to the Company, the SEC was requiring Bridgepoint to reassess whether collectability was reasonably assured on a student-by-student basis when recognizing revenue after a student’s initial enrollment upon certain changes in circumstances, such as when a student loses financial aid eligibility. Following this news, shares of Bridgepoint declined nearly 9%, to close on May 12, 2014, at $14.51 per share, on unusually heavy volume.
Furthermore, on May 30, 2014, Bridgepoint announced that its financial statements filed with the SEC for the years ended December 31, 2011 and December 31, 2012, as well as the financial statements issued for the quarters ended March 31, 2012, June 30, 2012 and September 30, 2012, should no longer be relied upon. According to the Company, these financial statements contained errors related to revenue recognition that resulted in material misstatements of revenue, bad debt expense and accounts receivable.
If you are a member of the Class described above, you have until April 27, 2015, to move the Court to serve as lead plaintiff, if you meet certain legal requirements. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you would like to learn more about these claims, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020 by telephone at (215) 638-4847, Toll Free at (888) 638-4847, or by email to firstname.lastname@example.org, or visit our website at http://www.howardsmithlaw.com.