DeVry Inc (NYSE: DV) Investor Securities Class Action Lawsuit 11/01/2010

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Company Name(s): 
DeVry
Case Name: 
DeVry Shareholder Class Action 11/01/2010
Case Status: 
Lawsuit Filed
Case Status: 
Case Dismissed
Affected Securities
NYSE: DV
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
11/01/2010
Class Period Begin: 
10/27/2007
Class Period End: 
08/11/2011
Court of Filing: 
U.S. District Court for the Northern District of Illinois
Deadline To File for Lead: 
12/31/2010
Case Dismissed: 
05/08/2014
Summary: 

May 8, 2014 - The court dismissed the case.

April 26, 2013 - The lead plaintiff filed a notice of appeal.

March 27, 2013 - The court granted the defendants' motion to dismiss, dismissing the complaint with prejudice.

July 10, 2012 - The defendants filed a motion to dismiss.

May 4, 2012 - The lead plaintiff filed an amended consolidated complaint on behalf of investors who purchased DeVry Inc (NYSE: DV) common shares between October 27, 2007 and August 11, 2011. The lead plaintiff alleges that the defendants violated the Securities Exchange Act of 1934 by issuing false and misleading statements between October 27, 2007 and August 13, 2010.

March 27, 2012 - The court granted the defendants' motion to dismiss and granted lead plaintiff leave to amend.

May 6, 2011 - The defendants filed a motion to dismiss.

March 7, 2011 - The lead plaintiff filed a consolidated complaint on behalf of investors who purchased DeVry Inc (NYSE: DV) common shares between October 27, 2007 and August 13, 2010. The lead plaintiff alleges that the defendants violated the Securities Exchange Act of 1934 by issuing false and misleading statements between October 27, 2007 and August 13, 2010.

January 5, 2011 - The lead plaintiff and lead counsel were appointed.

January 3, 2011 - Lead plaintiff motions were filed.

November 1, 2010 - An investor in shares of DeVry Inc (NYSE: DV) filed a lawsuit in the U.S. District Court for the Northern District of Illinois against DeVry Inc over alleged violations of Federal Securities Laws.

According to the complaint the plaintiff alleges on behalf of purchasers of the common stock of DeVry Inc (NYSE: DV) between October 25, 2007 and August 13, 2010 that DeVry Inc and certain of its officers and executives violated the Securities Exchange Act of 1934 by issuing materially false and misleading statements regarding DeVry Inc’s business and financial results. DeVry Inc's revenue more than doubled within the past four years. DeVry Inc reported on June 30, 2007 for the past 12 months Total Revenue of $933.47million, on June 30, 2008 $1.09183billion, on June 30, 2009, $1.46145billion, and on June 30, 2010, $1.91518billion. Its Net Income more than tripled over the same time frame. DeVry Inc reported on June 30, 2007 $76.19million and on June 30, 2010 $279.91million.

The lawsuit follows a report of the U.S. Government Accountability Office (“GAO”) titled “Undercover Testing Finds Colleges Encouraged Fraud and Engaged in Deceptive and Questionable Marketing Practices”. The report detailed undercover investigations into 15 for-profit schools that uncovered misconduct by school staff. According to this GAO study, the college personnel at schools may have encouraged applicants to falsify their financial aid forms to qualify for federal aid and pressured applicants to sign a contract for enrollment prior to allowing them to speak to a financial advisor. The undercover tests at 15 for-profit colleges found that 4 colleges encouraged fraudulent practices and that all 15 made deceptive or otherwise questionable statements to GAO’s undercover applicants. In particular, so the report, admissions or financial aid representatives at all 15 for-profit colleges provided our undercover applicants with deceptive or otherwise questionable statements, which included information about the college’s accreditation, graduation rates and its student’s prospective employment and salary qualifications, duration and cost of the program, or financial aid. Representatives at schools also employed hard-sell sales and marketing techniques to encourage students to enroll, so the report.

On August 13, 2010, after the market closed, the U.S. Department of Education released the 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 Inc was just 38%. On this news, the price of DeVry Inc 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.

Recently the Attorney General of Florida Bill McCollum launched an investigation into some for-profit education companies in that regard.

Shares of DeVry Inc (NYSE: DV) lost within the past month roughly 35% of its value and traded recently at $48.18 per share, down from its current 52weekHigh of $74.36 per share.