The US Supreme Court is upholding a $277 million securities fraud verdict against Apollo Group and two ex-Apollo executives over claims that they misled investors about a Department of Education review report dealing with student recruitment policies. Apollo is the University of Phoenix’s parent company. By issuing its order to uphold the U.S. Court of Appeals for the Ninth Circuit’s decision, which reverses the district court’s ruling to throw out the verdict, the justices denied the defendants’ petition for certiorari. The plaintiffs of this securities case are a class of investors that bought Apollo Group, Inc. common stock.
In 2004, the Education Department gave Apollo a preliminary report noting that the University of Phoenix had violated department regulations. Although the market did not react significantly to the news, Apollo’s stock dropped dramatically after two analyst reports downgraded the stock. Policemen’s Annuity and Benefit Fund of Chicago later submitted a securities class action case claiming that because misleading statements were made during the review, investors ended up sustaining losses when the analyst reports revealed the truth. A jury ruled in favor of the plaintiffs.
The verdict provides damages of $5.55/share for stock bought during the class period. Interest, which has been accruing since 2004, will be included, and may up the amount owed to plaintiffs to over $280 million.
Our securities fraud attorneys are here to fight for our institutional investor clients’ financial recovery. Over the years, we have successfully helped thousands of investors recoup their losses.
US High Court Rejects Review Of Apollo Group Securities Case, Wall Street Journal, March 22, 2011
Apollo Group, Inc. v. Policemen’s Annuity and Benefit Fund of Chicago, SCOTUS Blog, March 7, 2011
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