K12 Inc. Shareholders File Class-Action Lawsuit
Shareholders of Virginia-based K12 Inc.—which manages online schools across the country and in Colorado—have filed a class-action lawsuit against the company in U.S. District Court.
The lawsuit alleges that K12 violated provisions of the Securities and Exchange Act of 1934 by issuing false and misleading press releases, financial statements and filings with the SEC. The issues came to light in a New York Times article published last December, which outlined questionable student recruiting strategies and flawed academic assessment practices.
Shareholders contend that these facts were withheld from the public from the fall of 2009 until December 16, 2011. K12’s stock fell by 34.4 percent after the New York Times released its article.
K12 manages several online charter schools across the country, including Colorado Virtual Academy, which has more than 5,000 students. KUNC radio raised questions last September about K12’s profits and questionable student performance. Click here to read this story.
According to research published by the University of Colorado, K12 is one of the largest for-profit education management organizations in the country, overseeing almost 50 schools with more than 65,000 students.