New Oriental Education & Tech Grp (ADR) (NYSE:EDU) Investor Files Class Action Lawsuit Over Alleged Violations of Securities Laws
An investor in shares of New Oriental Education & Tech Grp (ADR) (NYSE:EDU) shares filed a lawsuit in the U.S. District Court for the Central District of California against New Oriental Education & Technology Group Inc. over alleged securities laws violations in connection with certain financial statements.
According to the complaint the plaintiff alleges on behalf of a class consisting of all persons or entities who purchased the American Depositary Shares (“ADSs”) of New Oriental Education & Technology Group Inc. (“EDU” or the “Company”) (NYSE:EDU) between July 21, 2009 and July 17, 2012, that New Oriental Education & Tech Grp and certain of its executive officers with violations of federal securities laws by issuing allegedly false and/or misleading statements, as well as allegedly failing to disclose material adverse facts about the New Oriental Education & Technology Group’s business, operations and prospects.
On July 17, 2012, New Oriental Education & Tech Grp (ADR) (NYSE:EDU) reported its unaudited financial results for the fiscal quarter and fiscal year ended May 31, 2012. New Oriental Education & Tech Grp disclosed that the U.S. Securities and Exchange Commission (“SEC”) has launched a formal investigation into New Oriental Education & Tech’s accounting practices. The SEC is investigating "whether there is a sufficient basis for the consolidation of Beijing New Oriental Education & Technology (Group) Co., a variable interest entity of the Company, and its wholly-owned subsidiaries, into the Company's consolidated financial statements," New Oriental Education said in its July 17, 2012 statement.
On July 18, 2012, a report was published by the research firm Muddy Waters Research, entitled, “Initiating Coverage on EDU – Strong Sell.”
Shares of New Oriental Education & Tech Grp (ADR) (NYSE:EDU) dropped from $22.26 per share on July 16, 2012 to as low as $9.50 per share on July 18, 2012.
On July 23, 2012, NYSE:EDU closed at $12.19 per share.