|Court:||United States District Court for the Southern District of New York|
|Class Period:||04/24/2018 - 07/22/2021|
|Case Leaders:||Salvatore J. Graziano, Michael D. Blatchley|
|Case Team:||Jonathan G. D’Errico|
This is a securities class action filed on behalf of all persons who purchased American Depository Shares of New Oriental Education & Technology Group Inc. (“New Oriental” or the “Company”) from April 24, 2018 through July 22, 2021. This action is brought against New Oriental and certain of the Company’s senior executives and asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as well as Rule 10b-5 promulgated thereunder.
New Oriental is a for-profit private education company that provides after-school tutoring for students in kindergarten through twelfth grade in China. This action arises out of New Oriental’s representations concerning its compliance with newly adopted regulations governing for-profit tutoring programs, including regulations designed to rein in the perceived costs of those programs and to reduce disparities in school performance between affluent students who could afford private tutoring and those who could not.
Specifically, throughout the Class Period, New Oriental touted its compliance with these regulations and that, in fact, increased governmental scrutiny into the for-profit education sector would benefit New Oriental in light of the Company’s purported positioning compared to its competitors. For example, New Oriental told investors that increased governmental scrutiny and regulation of the for-profit education industry presented “a great opportunity” for the Company “to consolidate the market and take more market share from the competitors.”
In reality, New Oriental failed to comply with the regulations governing the for-profit education industry, and increased government scrutiny into the for-profit education industry during the Class Period posed an existential threat to its business. Investors learned the truth about New Oriental through a series of disclosures revealing that the Company had fabricated teacher qualifications and user reviews, exaggerated the supposed effects of its programs, and misrepresented the true cost of its programs to customers. On July 23, 2021, the Chinese government unveiled a sweeping overhaul of regulations governing the for-profit education sector, banning private companies that teach public school curriculum from making any profits, raising capital, or going public—effectively ending any potential growth for the for-profit tutoring sector in China. Then, on July 25, 2021, New Oriental published an “update” admitting that these new regulations would have a “material adverse impact” on New Oriental’s business. In response to these disclosures, New Oriental shares declined dramatically and in a statistically significant manner, causing substantial damage to investors.
On May 13, 2022, the Honorable Victor Marrero appointed BLB&G client ACATIS Investment Kapitalverwaltungsgesellschaft mpH as Lead Plaintiff and BLB&G as Lead Counsel for the Class.
2022年5月13日，尊敬的Victor Marrero 法官委任BLB&G 的客户ACATIS Investment Kapitalverwaltungsgesellschaft mpH 为首席原告，委任BLB&G为该集体诉讼的首席代理。
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