Education Management Corporation
Robbins Umeda LLP Announces an Investigation of Education Management Corporation
Robbins Umeda LLP, a shareholder rights litigation firm, has commenced an investigation into possible breaches of fiduciary duty and other violations of the law by certain officers and directors at Education Management Corporation (NASDAQ: EDMC). Education Management is the second-largest for profit college chain, providing in class and online instruction to students in North America. The company was founded in 1962, and is headquartered in Pittsburgh, Pennsylvania.
Robbins Umeda LLP’s investigation focuses on whether the directors and officers of Education Management harmed the company by breaching their fiduciary duties to shareholders. In particular, the firm is investigating allegations that fiduciaries harmed the company by authorizing the use of improper sales and recruiting practices to defraud federal and state government agencies out of more than $11 billion dollars in student aid. Additionally, the firm is examining allegations that officials at Education Management illegally paid and unfairly incentivized recruiters to enroll new college students, regardless of a candidate’s previous educational background or the aptitude to meet minimum qualifications, like the ability to read and write.
On August 8, 2011, the U.S. Department of Justice, several states, and two whistle-blowers from the company filed suit against Education Management alleging violations of the False Claims Act and seeking monetary remedy for unjust enrichment. On this news, shares of the company’s stock lost 11% on the day to close at just $17.21 per share.
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