Sperling & Slater Files Class Action Suit Against Career Education Corporation

CHICAGO, Jan. 13, 2012 /PRNewswire/ -- Sperling & Slater (http://www.sperling-law.com/) today announced that a class action has been commenced in the United States District Court for the Northern District of Illinois on behalf of purchasers of Career Education Corporation ("CECO") (NYSE: CECO) Shares during the period between January 1, 2009 and November 1, 2011 (the "Class Period").

If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, Paul Slater or Scott Hessell of Sperling & Slater at (312) 641-3200, or via e-mail at [email protected] or [email protected]. Any member of the putative 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.

The complaint charges CECO and certain of its officers and directors with violations of the Securities Exchange Act of 1934. CECO operates various "for-profit" educational programs and services.

The complaint alleges that, during the Class Period, defendants issued materially false and misleading statements regarding the Company's business and prospects. Specifically, defendants misrepresented and/or failed to disclose the following: (a) that CECO was materially overstating its retention rates and employment, or "placement" rates following graduation ("Placement Rates"); (b) that the Company lacked adequate internal controls and was therefore unable to ascertain its true Placement Rates; (c) that CECO failed disclose that the Company's purported Placement Rates were achieved through an improper course of conduct and a manipulative use of the term "employment"; (d) that these Placement Rates were being reported in violation of the Company's accreditation status and therefore, in violation of their Title IV funding requirements; and (e) that, as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company and its prospects.

On May 17, 2011, CECO announced that it had received a subpoena from the Attorney General of the State of New York (the "NYAG"). The subpoena requested documents pertaining to student employment outcomes and Placement Rates of graduates among other items in connection with the NYAG's investigation into whether the Company and certain of its schools complied with certain New York state consumer protection, securities, finance and other laws. On May 24, 2011, the Company confirmed the NYAG's investigation and disclosed the existence of the Subpoena in a Form 8-K filed with the SEC. As a result of these announcements, the price of CECO common stock dropped approximately 3% from $22.39 on May 17, 2011 to $21.69 on May 25, 2011.

Purportedly in connection with the NYAG's investigation, on August 3, 2011, the Company reported that it had retained outside counsel (subsequently identified as Dewey & LeBoeuf LLP) to conduct an internal investigation to determine if the Placement Rates that CECO was reporting to various accreditation agencies were accurate. On November 1, 2011, the Company released preliminary results of the investigation in Dewey & LeBoeuf LLP ("Dewey Report"), which showed that many of CECO's schools had been artificially inflating the Placement Rates reported to accreditation agencies. In reaction to these announcements, the price of CECO common stock declined 15%, from $21.87 per share to $18.51 per share.

Plaintiff seeks to recover damages on behalf of all purchasers of CECO shares during the Class Period (the "Class"). Plaintiff is represented by Sperling & Slater which is on of the nation's preeminent litigation boutiques.

Sperling & Slater is a Chicago-based litigation firm. We are often hired to initiate or defend complex litigation by clients of all sizes, from individual entrepreneurs to Fortune 500 companies. In addition, attorneys from the country's most prestigious large law firms regularly call on us to represent them or their clients in important, high stakes disputes. Frequently we serve as lead counsel in multiple, related cases involving numerous co-parties – and opponents. The firm has achieved superior results in the courtroom in all areas of complex business litigation, including securities, antitrust, bankruptcy and insolvency, and intellectual property.

Contacts:

Paul Slater or Scott Hessell of Sperling & Slater at (312) 641-3200, or via e-mail at [email protected] or [email protected].

SOURCE Sperling & Slater