Milberg LLP has filed a federal securities class action against Bridgepoint Education, Inc. ("Bridgepoint" or the "Company") (NYSE:BPI) and certain of its officers and directors alleging violations of the Securities Exchange Act of 1934. The action (3:12-cv-01841), filed in the United States District Court for the Southern District of California, is on behalf of purchasers of Bridgepoint common stock between May 3, 2011 and July 12, 2012, inclusive (the "Class Period").
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The Complaint alleges that throughout the Class Period defendants misrepresented and/or failed to disclose that: (1) the Company did not employ sufficient plans, procedures and practices to help students finish their academic programs; (2) the Company failed to provide adequate resources, thus preventing its students from moving forward to acceptable levels; (3) the Company’s Ashford University failed to uphold an ample number of faculty and programs, resulting in meager instruction and low completion rates by students; (4) the Company had insufficient review measures such that shortfalls in completion rates were not appropriately recognized and corrected; (5) Ashford University failed to preserve an empowered and independent governing board; and (6) as a result of the above, the Company’s financial statements were materially false and misleading.
On July 9, 2012, Bridgepoint disclosed that Ashford University was denied accreditation by the Accrediting Commission for Senior Colleges and Universities of the Western Association of Schools and Colleges (“WASC”). In response, shares fell $7.25 per share, or 33.72%.
On July 13, 2012, the Company disclosed that Ashford University received a letter from the Higher Learning Commission (“HCL”) of the Northern Central Association of schools and Colleges requiring it “to provide certain information and evidence of compliance with HCL accreditation standards.” In response, shares fell $3.20 per share, or 24.67%.