NEW YORK, July 17, 2012 /PRNewswire/ -- Bernstein Liebhard LLP today announced that a class action has been commenced in the United States District Court for the Southern District of California on behalf of a class of purchasers of Bridgepoint Education, Inc. ("Bridgepoint" or the "Company") (NYSE: BPI) stock between May 3, 2011 and July 6, 2012 (the "Class Period").
The complaint charges Bridgepoint and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Bridgepoint is a for-profit provider of postsecondary education services. The Company's academic institutions include Ashford University ("Ashford") located in Clinton, Iowa, and University of the Rockies located in Colorado Springs, Colorado, as well as online institutions.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company's business and prospects. Specifically, defendants concealed accreditation problems with the Company's Ashford campus. As a result of defendants' false statements, Bridgepoint stock traded at artificially inflated prices during the Class Period, reaching a high of $30.50 per share on July 22, 2011.The complaint alleges that in May and June 2011, the Western Association of Schools and Colleges ("WASC") and its eligibility review committee notified Ashford of several concerns it had regarding the institution's future accreditation. Thus, by the Spring of 2011, at the latest, the Company had been advised that Ashford's accreditation was at risk. Then, on July 9, 2012, Bridgepoint filed a Form 8-K with the SEC disclosing that on July 5, 2012, Ashford had received an official notice denying its accreditation application by the Accrediting Commission for Senior Colleges and Universities of the WASC. On this news, Bridgepoint stock plunged $7.25 per share to close at $14.25 per share on July 9, 2012, a decline of nearly 34% on volume of 1.2 million shares. According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) the Company had failed to implement plans, procedures and practices to sufficiently assist students in staying with the programs they enrolled in and complete the courses; (b) the Company failed to align resources with educational requirements such that students were not benefitting from the resources available and were therefore not progressing to an acceptable level; (c) Ashford failed to maintain a sufficient core of faculty and programs to develop faculty, leading to poor teaching and poor completion rates by students; (d) Bridgepoint had inadequate review procedures such that shortfalls were not quickly identified and remedied; and (e) Ashford failed to maintain an empowered and independent governing board.