A lawsuit seeking class action status has been filed in the United States District Court for the Central District of California on behalf of purchasers of Corinthian Colleges, Inc. (NASDAQ:COCO) securities from August 27, 2003, through June 23, 2004, inclusive.
Corinthian operates approximately 150 for-profit colleges and training centers in North America, including Bryman College, Florida Metropolitan University, Rhodes College and the National Institute of Technology.
The complaint alleges that Corinthian and certain of its officers violated federal securities laws by failing to disclose the Company's lack of internal controls and that the Department of Education had uncovered violations in the application process for federal student loans at one of its campuses in December of 2003. The complaint further alleges that as a result, the school had lost its ability to receive advance payments on its student loans. Only after these events were ultimately revealed by certain publications did the Company acknowledge them to the investing community. In fact, during the Class Period, defendants specifically denied knowledge of any "events or activities that would warrant any concern in the company's performance," and continued to announce record results and optimistic forecasts to the market. All the while, certain company insiders sold more than $18 million worth of their personal shares of Corinthian stock during the Class Period.