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Harwood Feffer LLP Announces Investigation Of Education Management Corp.

Stocks in this article: EDMC

NEW YORK, Sept. 4, 2012 /PRNewswire/ --  Harwood Feffer LLP ( www.hfesq.com ) is investigating potential claims against the board of directors of Education Management Corp. ("EDMC" or the "Company") (NASDAQ: EDMC), concerning whether the board has breached its fiduciary duties to shareholders.

(Logo:  http://photos.prnewswire.com/prnh/20120215/MM54604LOGO )

The Company is currently facing costly public and legal scrutiny, including a qui tam action filed under the False Claims Act related to improper bonus compensation for recruiting staff, a subpoena from the Office of Inspector General of the U.S. Department of Education, a lawsuit related to deceptive claims made to students in Texas regarding accreditation issues, and investigations by the attorneys general of Kentucky, Florida, New York, and Massachusetts.  

Access to federal Title IV funds is conditioned on an institution maintaining valid accreditation.  Any one of the foregoing investigations and lawsuits could result in one or more of EDMC's schools losing accreditation.  EDMC would be forced to close any school that lost its accreditation due to the Company's 90% reliance on Title IV funds. 

The Company has incurred, and will continue to incur, substantial costs related to responding to the subpoenas and investigations, and defending itself from the various lawsuits it faces.  Moreover, the Company's reputation as an educator has been seriously harmed, as evidenced by a year-over-year enrollment decrease of nearly 10% from 2011 to 2012.  In the past calendar year, EDMC stock has plunged from a high of $28.66 and is currently trading under $3.00 per share.

Current holders of EDMC shares purchased at any time may have a claim against the board for breaches of fiduciary duties, gross mismanagement, and/or abuse of control.  If you own EDMC shares and wish to discuss this matter with us, or have any questions concerning your rights and interests with regard to this matter, please contact:

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