SAN DIEGO & PHOENIX--(BUSINESS WIRE)--Shareholder rights law firm Robbins LLP announces that a purchaser of Grand Canyon Education, Inc. (NASDAQ: LOPE) filed a class action complaint against the Company for alleged violations of the Securities Exchange Act of 1934 between January 5, 2018 and January 27, 2020. Grand Canyon provides education services to colleges and universities in the United States.
If you suffered a loss as a result of Grand Canyon's misconduct, click here.
Grand Canyon Education, Inc. (LOPE) Accused of Misleading Shareholders
According to the complaint, in July 2018, Grand Canyon spun-off of its education assets through a sale to non-profit entity, Grand Canyon University ("GCU"). The spin-off resulted in Grand Canyon becoming an alleged third-party provider of education services to GCU while GCU was to operate as an independent, non-profit entity. Following this spin-off, Grand Canyon consistently touted growth in net income and adjusted EBITDA. However, on September 9, 2019, Citron Research published a report revealing that it believed Grand Canyon "[had been] stuffing GCU with expenses to inflate its own profitability and as a result bankrupting GCU." About two months later, Grand Canyon announced its application for GCU's designation as a non-profit had been denied by the U.S Department of Education ("DOE"). Then, on January 28, 2020, Citron Research expanded on the DOE's findings, stating that Grand Canyon was the "educational Enron" that used its non-reporting subsidiary to "dump expenses and liabilities, while receiving a disproportionate amount of revenue at inflated margins…to artificially inflate the stock price." Following these disclosures, Grand Canyon's stock price fell $30.40, or 26%, to close at $84.07 per share on January 28, 2020.
Grand Canyon Education, Inc. (LOPE) Shareholders Have Legal Options
Robbins LLP is a nationally recognized leader in shareholder rights law. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested. Click here to receive free alerts from Stock Watch when companies engage in wrongdoing.
Attorney Advertising. Past results do not guarantee a similar outcome.