Monday, September 20, 2010
Bernstein Liebhard LLP today announced that it filed a class action in the United States District Court for the District of New Jersey on behalf of purchasers (the “Class”) of Lincoln Educational Services Corporation (“Lincoln” or the “Company”) (NASDAQ: LINC) common stock during the expanded period of March 13, 2009 and August 5, 2010, inclusive (the “Class Period”).
Lincoln and certain of its officers are charged with making a series of materially false and misleading statements related to the Company’s business and operations in violation of the Securities Exchange Act of 1934.
Throughout the Class Period, defendants issued a series of materially false and misleading statements regarding Lincoln’s compliance with governmental regulations, and the growth and foreseeable profitability of Lincoln.
Defendants’ Class Period statements were materially false and misleading when made, and were known by defendants to be false or were recklessly disregarded as such thereby, for the following reasons, among others: Lincoln was not compliant with government regulations under Title IV; Defendants had propped up the Company’s results by fraudulently inducing students to enroll in Lincoln’s scholastic and educational programs and engaged in other manipulative recruiting tactics which defendants knew, or recklessly disregarded, could not be maintained; Defendants materially overstated the Company’s growth prospects by failing to properly disclose that defendants had engaged in illicit and improper recruiting activities, which also had the effect of artificially inflating the Company’s reported results and future growth prospects; and Lincoln did not have adequate systems of internal operational or financial controls, such that Lincoln’s reported operational statements and foreseeable growth prospects were true, accurate, or reliable.
During the Class Period, Defendant and Lincoln Executive Chairman James Carney sold almost $6 million in Lincoln stock while in possession of material inside information about the Company.
It was only on August 5, 2010, however, that investors learned the truth about Lincoln after the Company announced that it was changing its recruitment standards and could no longer maintain its growth expectations. This came right on the heels of the United States General Accounting Office’s (“GAO”) report concluding that for-profit educational institutions like Lincoln had engaged in an illegal and fraudulent course of action designed to recruit students and over-charge the federal government for the cost of such education. The August 5th release implicated Lincoln’s compliance with government (Title IV) regulations because Lincoln reported a sudden change in “student starts” for the upcoming quarter right after the government findings of wrongdoing concerning recruitment. Following these disclosures, shares of the Company fell over $4.30, or almost 20% in a single trading day, on unusually high trading volume.
Plaintiff seeks to recover damages on behalf of all Class members who purchased or otherwise acquired shares of Lincoln during the Class Period. If you purchased or otherwise acquired Lincoln shares during the Class Period, and either lost money on the transaction or still hold the shares, you may wish to join in this action to serve as lead plaintiff. In order to do so, you must meet certain requirements set forth in the applicable law and file appropriate papers no later than October 15, 2010.
A “lead plaintiff” is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiff. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Bernstein Liebhard LLP, or other counsel of your choice, to serve as your counsel in this action.
If you are interested in discussing your rights as a Lincoln shareholder and/or have information relating to the matter, please contact Joseph R. Seidman, Jr. at (877) 779-1414 or seidman@bernlieb.com.
Bernstein Liebhard has pursued hundreds of securities, consumer and shareholder rights cases and recovered almost $3 billion for its clients. It has been named to The National Law Journal’s “Plaintiffs’ Hot List” in each of the last seven years.
You can obtain a copy of the complaint here
