In re Grand Canyon Education, Inc. Securities Litigation

Court: United States District Court for the District of Delaware
Case Number: 1:20-cv-00639-MN-CJB
Class Period: 01/05/2018 - 01/27/2020
Case Leaders: Katherine M. Sinderson, Gregory V. Varallo
Case Team: Robert Kravetz, Michael Mathai

On May 12, 2020, Bernstein Litowitz Berger & Grossmann filed a class action lawsuit on behalf of its client, Fire and Police Pension Association of Colorado (“Lead Plaintiff”) for violations of the federal securities laws in the U.S. District Court for the District of Delaware against Grand Canyon Education, Inc. (“Grand Canyon”) and certain of Grand Canyon’s senior executives (collectively, “Defendants”) on behalf of investors in Grand Canyon common stock between January 5, 2018, and January 27, 2020, inclusive (the “Class Period”).The case is captioned In re Grand Canyon Education, Inc. Securities Litigation, No. 1:20-cv-00639-MN-CJB (D. Del.).

Lead Plaintiffs Have Reached a Proposed Settlement of the Action for $25.5 Million

Lead Plaintiffs Fire and Police Pension Association of Colorado, Oakland County Employees’ Retirement System, and Oakland County Voluntary Employees’ Beneficiary Association Trust (together, “Lead Plaintiffs”), on behalf of themselves and the Settlement Class, have reached a proposed settlement of the Action for $25,500,000 in cash that, if approved, will resolve the Action (the “Settlement”).

If you are a member of the Settlement Class, your rights will be affected and you may be eligible for a payment from the Settlement. The Settlement Class consists of:

all persons and entities who purchased Grand Canyon common stock during the period from January 5, 2018 through January 27, 2020, inclusive, and who were damaged thereby

Certain persons and entities are excluded from the Settlement Class by definition (see paragraph 26 of the Notice) or may request exclusion pursuant to the instructions set forth in the Notice (see paragraph 56 of the Notice).

Please read the Notice to fully understand your rights and options. Copies of the Notice and Claim Form can be found in the Case Documents list on the right of this page. You may also visit the case website,, for more information about the Settlement.

To be eligible to receive a payment under the proposed Settlement, you must submit a Claim Form postmarked (if mailed) or submitted on-line by no later than September 19, 2024.

Payments to eligible claimants will be made only if the Court approves the Settlement and a plan of allocation, and only after any appeals are resolved, and after the completion of all claims processing. Please be patient, as this process will take some time to complete.


September 19, 2024

Claim Filing Deadline.  Claim Forms must be postmarked (if mailed) or submitted on-line no later than September 19, 2024.

August 1, 2024

Exclusion Deadline.  To exclude yourself from the Settlement Class, you must submit a written request for exclusion so that it is received no later than August 1, 2024, in accordance with the instructions in the Notice.  

August 1, 2024

Objection Deadline.  Any objections to the proposed Settlement, the proposed Plan of Allocation, or the motion for attorneys’ fees and expenses, must be submitted so they are received no later than August 1, 2024, in accordance with the instructions in the Notice.

August 22, 2024
at 11:00 a.m.

Settlement Hearing.The Settlement Hearing will be held on August 22, 2024 at 11:00 a.m., before the Honorable Christopher J. Burke, of the United States District Court for the District of Delaware, in Courtroom 2A of the J. Caleb Boggs Federal Building and United States Courthouse, 844 North King Street, Wilmington, DE 19801. The Settlement Hearing will be held by the Court to consider, among other things, whether the proposed Settlement is fair, reasonable, and adequate and should be approved; whether the proposed Plan of Allocation is fair and reasonable and should be approved; and whether Lead Counsel’s motion for attorneys’ fees and expenses should be approved.

Background and History of the Litigation

As alleged in the complaint, Defendants inflated Grand Canyon’s financial results by spinning off its formerly for-profit university, Grand Canyon University, (“GCU”) as a purportedly non-profit university, New GCU, which it used as an off-balance-sheet entity to which Grand Canyon was able to funnel expenses and costs in exchange for a disproportionate amount of revenue. Defendants repeatedly made false and misleading statements to investors describing New GCU as a “non-profit” and “independent” institution, misstating Grand Canyon’s role as a third-party provider of education services, and misstating the Company’s financial results. In addition, the Company failed to disclose to investors that it had received repeated communications from the U.S. Department of Education (“DOE”) putting the agency’s approval of the spinoff in doubt. 

Lead Plaintiff alleged that the truth emerged through a series of disclosures beginning on November 6, 2019, when Grand Canyon announced that it had received a letter from the DOE denying its application for designation of New GCU as a non-profit. That denial was based on the DOE’s finding, through an examination of several confidential analyses of the transaction commissioned by Grand Canyon’s Board of Directors, that New GCU was Grand Canyon’s “captive client” and that New GCU “is not the entity actually operating [GCU].” The DOE concluded that the relationship between Grand Canyon and New GCU violated “the most basic tenet of nonprofit status—that the nonprofit be primarily operated for a tax-exempt purpose and not substantially for the benefit of any other purpose or entity.” Then, on January 28, 2020, financial analyst Citron Research published a second report expanding on the DOE’s findings, citing hundreds of pages of non-public supporting documentation from Grand Canyon that Citron obtained through a Freedom of Information Act request. That report described Grand Canyon as the “educational Enron,” using a “captive non-reporting subsidiary” to “dump expenses and liabilities, while receiving a disproportionate amount of revenue at inflated margins in order to artificially inflate the stock price.” Lead Plaintiffs alleged that, as a result of these disclosures, the price of Grand Canyon common stock declined precipitously.

On December 21, 2020, Defendants moved to dismiss the Complaint. Lead Plaintiffs opposed that motion on February 19, 2021. Defendants filed their reply on March 22, 2021. The Court held oral argument on the motion to dismiss on May 26, 2021, and dismissed Lead Plaintiffs’ complaint on August 9, 2021. Plaintiffs filed an amended complaint on January 21, 2022. Defendants filed their motion to dismiss the amended complaint on March 15, 2022. Lead Plaintiffs filed their opposition to that motion on May 6, 2022, and Defendants filed their reply in further support of their motion on June 3, 2022. Oral argument on the motion was held on October 25, 2022.

On February 17, 2023, Magistrate Judge Christopher J. Burke issued a Report and Recommendation to deny Defendants’ motion to dismiss the Complaint. On February 27, 2023, Defendants filed objections to the Report and Recommendation and, on March 9, 2023, Plaintiffs filed their response to Defendants’ objections. On March 28, 2023, after oral argument, the Court overruled Defendants’ objections and adopted the Report and Recommendation, denying Defendants’ motion to dismiss the Complaint.

Discovery in the Action commenced in April 2023.  In response to Lead Plaintiffs’ requests for production of documents, Defendants produced thousands of documents to Lead Plaintiffs.  The Parties subpoenaed more than ten third parties and received additional documents from them.  In addition, the Parties met and conferred and exchanged numerous letters concerning disputed discovery issues over several months.

The Parties began exploring the possibility of a settlement in the fall of 2023. The Parties agreed to engage in private mediation and retained Michelle Yoshida of Phillips ADR Enterprises to act as mediator in the Action (the “Mediator”). On November 14, 2023, counsel for the Parties participated in a full-day mediation session before the Mediator. In advance of that session, the Parties exchanged and submitted detailed confidential mediation statements to the Mediator.  The session ended without any agreement being reached.

On January 5, 2024, Lead Plaintiffs filed their motion for class certification and appointment of class representatives and class counsel, which was accompanied by a report from Lead Plaintiffs’ expert on market efficiency and common damages methodologies.

On February 21, 2024, the Parties participated in a second full-day mediation session before the Mediator. In advance of the mediation session, the Parties again exchanged and submitted confidential mediation statements to the Mediator. At the conclusion of this second mediation session, the Mediator made a recommendation that the Action be settled for $25.5 million, which the Parties accepted.

On March 25, 2024, the Parties entered into a Stipulation and Agreement of Settlement, which sets forth the terms and conditions of the Settlement. 

On May 1, 2024, the Court preliminarily approved the Settlement, authorized notice of the Settlement to be sent to potential Settlement Class Members, and scheduled the final Settlement Hearing for August 22, 2024 to consider whether to grant final approval to the Settlement.