Rigrodsky & Long, P.A. announces that a complaint has been filed in the United States District Court for the Central District of California on behalf of all persons or entities that purchased the securities of New Oriental Education & Technology Group Inc. (“New Oriental Education” or the “Company”) (NYSE: EDU) between July 21, 2009 and July 17, 2012, inclusive (the “Class Period”), alleging violations of the Securities Exchange Act of 1934 against the Company and certain of its officers and directors (the “Complaint”). If you purchased the American Depository Shares (“ADSs”) of New Oriental Education during the Class Period and wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact Timothy J. MacFall, Esquire or Peter Allocco of Rigrodsky & Long, P.A., 825 East Gate Boulevard, Suite 300, Garden City, NY at (888) 969-4242, by e-mail to firstname.lastname@example.org, or at: http://www.rigrodskylong.com/investigations/new-oriental-education-technology-group-inc-edu. New Oriental Education, a Chinese corporation headquartered in Beijing, China, is the largest provider of private educational services in China based on the number of program offerings, total student enrollments and geographic presence. The Complaint alleges that throughout the Class Period, defendants made materially false and misleading statements regarding the Company’s business operations, financial condition and prospects. Specifically, the Complaint alleges (1) that the Company lacked a sufficient basis for the consolidation of Beijing New Oriental Education & Technology (Group) Co., a variable interest entity of the Company, and its wholly-owned subsidiaries, into New Oriental Education’s consolidated financial statements; (2) that, as a result, the Company was improperly consolidating Beijing New Oriental Education & Technology (Group) Co., Ltd., into New Oriental Education’s consolidated financial statements; (3) that, contrary to the Company’s representations, New Oriental Education’s entire store network is not company-owned because New Oriental Education has numerous franchisees; (4) that upfront franchise and other fees had inflated New Oriental Education’s cash balances; (5) that the schools that conduct New Oriental Education’s operations were ultimately state property; (6) that, as a result of the foregoing, the Company’s financial results were misstated during the Class Period; (7) that the Company lacked internal and financial controls; and (8) that, as a result, the Company’s financial statements and financial results were materially false and misleading at all relevant times. As a result of defendants’ false and misleading statements, the Company’s stock traded at artificially inflated prices during the Class Period.
According to the Complaint, on July 17, 2012, New Oriental Education issued a press release disclosing that the Company had been informed on July 13, 2012 that the U.S. Securities and Exchange Commission (the “SEC”) had issued a formal order of investigation captioned, “In the Matter of New Oriental Education & Technology Group Inc.” The Company believes that the investigation concerns whether there is a sufficient basis for the consolidation of Beijing New Oriental Education & Technology (Group) Co., Ltd., a variable interest entity of the Company, and its wholly-owned subsidiaries, into the Company’s consolidated financial statements. On this news, shares of the Company declined $7.64 per share, closing at $14.62 on July 17, 2012, on volume of over 4 million shares.On July 18, 2012, a report was published by the research firm Muddy Waters Research, entitled, “Initiating Coverage on EDU – Strong Sell.” In this report, the firm rated New Oriental a “Strong Sell because it is probable that EDU will have a significant restatement” and indicated that it was possible that its auditor would resign. On this news, shares of the Company declined $5.12 per share, closing at $9.50 per share on July 18, 2012, on volume of over 10 million shares. If you wish to serve as lead plaintiff, you must move the Court no later than September 21, 2012. A lead plaintiff is a representative party acting 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. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the proposed class may move the court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
While Rigrodsky & Long, P.A. did not file the Complaint in this matter, the firm, with offices in Wilmington, Delaware and Garden City, New York, regularly litigates securities class, derivative and direct actions, shareholder rights litigation and corporate governance litigation, including claims for breach of fiduciary duty and proxy violations in the Delaware Court of Chancery and in state and federal courts throughout the United States.Attorney advertising. Prior results do not guarantee a similar outcome.