K12 Misled Shareholders – AGAIN

Robbins Arroyo LLP: K12, Inc. (LRN) Misled Shareholders According to a Recently Filed Class Action

July 22, 2016 07:59 PM Eastern Daylight Time

SAN DIEGO & HERNDON, Va.–(BUSINESS WIRE)–Shareholder rights law firm Robbins Arroyo LLP announces
that a class action complaint was filed against K12, Inc. (NYSE: LRN) in
the U.S. District Court for the Northern District of California. The
complaint is brought on behalf of all purchasers of K12 securities
between November 7, 2013 and October 27, 2015, for alleged violations of
the Securities Exchange Act of 1934 by K12’s officers and directors. K12
Inc., a technology-based education company, offers proprietary
curriculum, software systems, and educational services to facilitate
individualized learning for students primarily in kindergarten through
12th grade.

“In the Matter of the Investigation of:
For-Profit Virtual Schools.”

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View this information on the law firm’s Shareholder Rights Blog: www.robbinsarroyo.com/shareholders-rights-blog/k12-inc-july-2016

K12 Accused of Lying About The Success Rate of Its Students

According to the complaint, throughout the class period, K12 filed
several press releases and submitted multiple filings with the U.S.
Securities and Exchange Commission touting the company’s business
prospects. The company issued a press release on February 4, 2014,
stating, “Our Managed Schools are now…using many of the new educational
programs we put in place this year which we believe will improve
educational outcomes for all engaged families.” The company further
emphasized that improving academic outcomes is its number one priority
and that it would invest in new systems to drive further improvements
for its students. However, the complaint alleges that K12 officials
failed to disclose that: (1) K12 was publishing misleading
advertisements about students’ academic progress, parent satisfaction,
their graduates’ eligibility for University of California and California
State University admission, class sizes, the individualized and flexible
nature of K12’s instruction, hidden costs, and the quality of the
materials provided to students; (2) K12 submitted inflated student
attendance numbers to the California Department of Education in order to
collect additional funding; (3) as a result, K12 was open to potential
civil and criminal liability; and (4) the company would likely be forced
to end these practices, which would have a negative impact on K12’s
operations and prospects.

On October 27, 2015, Stanford’s Center for Research on Education
Outcomes published a study and a related press release about online
charter schools, including K12, stating, “Innovative new research
suggests that students of online charter schools had significantly
weaker academic performance in math and reading, compared with their
counterparts in conventional schools.” On the same day, K12 reported
disappointing first quarter 2016 financial results compared to the same
quarter in fiscal year 2015, including revenues of $221.2 million
compared to $236.7 million, Earnings Before Interest, Taxes,
Depreciation and Amortization of negative $3.9 million compared to $3.7
million, and an operating loss of $20.5 million compared to an operating
loss of $13.2 million. On October 27, 2015, K12 disclosed in its Form
10-Q that it received a subpoena from the Attorney General of the State
of California, Bureau of Children’s Justice in connection with an
investigation known as “In the Matter of the Investigation of:
For-Profit Virtual Schools.” On this news, K12 stock fell over 20% to
close at $9.71 per share on October 30, 2015.

K12 Shareholders Have Legal Options

Concerned shareholders who would like more information about their
rights and potential remedies can contact attorney Darnell R. Donahue at
(800) 350-6003, DDonahue@robbinsarroyo.com,
or via the shareholder
information form
on the firm’s website.

Robbins Arroyo 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.

Attorney Advertising. Past results do not guarantee a similar outcome.


Robbins Arroyo LLPDarnell R. Donahue619-525-3990 or Toll
Free 800-350-6003DDonahue@robbinsarroyo.comwww.robbinsarroyo.com

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