Invested in
Grand Canyon Education?
Contact investor lawyers for a free evaluation of your potential claims for compensation today.
- Did you invest in Grand Canyon Education, Inc. (Nasdaq: LOPE) between January 5, 2018 and January 27, 2020 and have you held your LOPE shares since?
- Are you concerned about the allegations that Grand Canyon Education inflated its financial results by using Grand Canyon University as an off-balance-sheet entity and funneling expenses to it in exchange for a disproportionate share of revenue?
- Are you concerned you may have purchased Grand Canyon’s common stock at artificially inflated prices?
- Would you like your potential options for compensation and/or redress to be reviewed by an experienced team of investor lawyers?
Request a free case evaluation via email at arosca@rscounsel.law, leave a message through the contact form on this page, or call us at 888-998-0530.
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Posted August 18, 2022
Grand Canyon Education Investigation
Securities attorneys Alan Rosca and Paul Scarlato have been investigating allegations of securities violations, corporate misconduct, and questionable business practices and misrepresentations involving Grand Canyon Education and have identified potential areas of concern.
LOPE investors who invested between January 5, 2018 and January 27, 2020 and are interested to evaluate potential options to seek compensation and/or pursue claims related to their Grand Canyon Education investment may contact investor rights attorneys Alan Rosca and Paul Scarlato. Attorneys Rosca and Scarlato have extensive experience in seeking compensation related to investor harm and pursuing claims arising out of alleged violations of securities law and/or corporate misconduct and are currently evaluating potential claims on behalf of investors in Grand Canyon Education. They typically work on a contingent fee basis, do not require any money down from their clients, advance case expenses, and only get paid for their fees and expenses if and when successful, pursuant to court review and approval.
Claims that are not timely pursued may expire or otherwise be lost, generally speaking. Grand Canyon Education investors interested to explore options to file claims for compensation should consider taking action promptly.
Concerned LOPE stock stock investors investors may contact attorneys Alan Rosca or Paul Scarlato to discuss their potential options toll free at 888-998-0530, via email at arosca@rscounsel.law, or through the contact form on this webpage.
About Grand Canyon Education, Inc.
Grand Canyon Education, Inc. is a Phoenix, Arizona based education services company that reportedly develops technological solutions, infrastructure and operational processes to provide services to colleges and universities. According to the most recent 10-K Annual Report, Grand Canyon Education’s “most significant partner” is Grand Canyon University, described as “an Arizona non-profit corporation that operates a comprehensive regionally accredited university.”
Grand Canyon Education’s common stock trades on the Nasdaq Global Market under the symbol “LOPE.” According to data from Yahoo! Finance, shortly after it was listed the price per LOPE share saw a relatively consistent growth in value that accelerated in September 2016, when it closed at $40.40, until November 2018 when it closed at $128.47 per share.
Over the following months, the price per LOPE share started to decline until January 2019 when it closed at $90.83, but then the price resumed its upward trajectory to close at $131.30 in August 2019, after some significant fluctuations. By the end of January the price per LOPE share declined to close at $84.46, then it briefly recovered to close at $97.99 at the end of 2019, and by mid-March 2020 the price per LOPE share closed at $59.33. On August 15, 2022, LOPE closed at $84.81.
Grand Canyon Education Class Action Complaint Alleged Violations of Securities Laws
In May 2020, a class action complaint was filed against Grand Canyon Education, Brian E. Mueller (Grand Canyon’s CEO and Chairman), and Daniel E. Bachus (Grand Canyon’s CFO). In October 2020 the plaintiffs filed the amended consolidated complaint, which was followed by a second amended complaint filed in January 2022.
The plaintiffs alleged, among others, that the defendants engaged in securities fraud in connection with the attempt to spin off Grand Canyon University as a “non-profit” university. According to the complaint, in January 2018 Grand Canyon Education filed a 8-K report disclosing that the company applied to The Higher Learning Commission for accreditation of New Grand Canyon University as an independent entity from Grand Canyon Education and as a non-profit institution. Through an 8-K report filed in July 2018, the company announced that on July 1, 2018, Grand Canyon Education spun off the University for the purchase price of $875 million to be paid in the form a seven-year secured note held by Grand Canyon Education.
The class action complaint alleged that, following the 2018 spin-off, Grand Canyon Education “consistently reported growth in net income and adjusted earnings,” while unbeknownst to investors, Grand Canyon Education and Grand Canyon University allegedly entered into a shared services agreement pursuant to which Grand Canyon University acted as an off-balance-sheet entity to which Grand Canyon Education funneled expenses and costs in exchange for a disproportionate amount of revenue.
In September 2019, a company called Citron Research issued a report called “Structural Change Without Legacy Customers Has (LOPE) Falling off a Cliff”. The report claimed, among others, that Grand Canyon Education is “stuffing GCU with expenses to inflate its own profitability and as a result bankrupting GCU.” Two months later, during the November 2019 earnings call, Grand Canyon Education allegedly revealed the Department of Education (DOE) declined to grant non-profit status to the Grand Canyon University, indicating that the entity does not satisfy the Department’s definition of a nonprofit. The DOE letter dated November 6, 2019 may be reviewed here.
On January 28, 2020, Citron Research published a second report, with the title “The Educational Enron. The Multiple Smoking Guns that Prove LOPE is Using Captive Subsidiary to Manipulate Earning”. The report allegedly analyzed Grand Canyon’s financial results and additional evidence reportedly obtained from the DOE, and concluded that Grand Canyon Education was using Grand Canyon University to “dump expenses and liabilities, while receiving a disproportionate amount of revenue at inflated margins in order to artificially inflate the stock price.”
Following those disclosures, LOPE’s price declined and the plaintiffs sought compensatory damages, pre- and post-judgment interest, as well as fees and costs. The class action is currently pending.
Potential Compensation Claims
Grand Canyon Education Shareholders May Have Options
Investor rights attorneys Alan Rosca and Paul Scarlato at Rosca Scarlato LLC law firm are investigating potential options and are evaluating potential claims for compensation on behalf of LOPE shareholders. They have decades of combined experience representing victims of corporate or financial misconduct.
If you are a Grand Canyon Education investor concerned about your investment, you may contact attorneys Alan Rosca or Paul Scarlato to learn more about your rights and for an evaluation of your potential claims, or to provide useful information. All consultations are free. The Rosca Scarlato LLC attorneys typically take cases like this on a contingency fee basis, advance all case costs, and only get paid for their fees and expenses if and when they are successful, following review and approval by the Court of any fee application.
To reach attorney Alan Rosca or his colleagues, Grand Canyon Education investors may call 888-998-0530, email arosca@rscounsel.law, or leave a message through the contact form on this webpage.
These general considerations are for informational purposes only and do not constitute legal advice. Such legal advice can only be offered once the attorneys discuss each investor’s situation, learn of the relevant facts, and can tailor any advice to that investor’s facts. Grand Canyon Education Investor Center is not affiliated with Grand Canyon Education, Inc.
Contact info:
Rosca Scarlato LLC – 216-946-7070 / 888-998-0530.
Alan Rosca – arosca@rscounsel.law
Paul Scarlato – pscarlato@rscounsel.law
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DISCLAIMER
In our legal system, every person is innocent until and unless found guilty by a court of law or a tribunal. Whenever we reference “allegations” or charges that are “alleged,” such allegations or charges have not been proven, and are merely accusations, not findings of fault, as of the date of the blog. We do not have, nor do we undertake, a duty to continue to monitor or follow matters about which we report, and/or to publish subsequent updates regarding various developments that may occur in such matters. Readers are encouraged to conduct their own research regarding any such matters and any developments that may or may not have occurred in such matters. Also, the Brokercheck report linked to some of our blogs is the up-to-date version as of the date of accessing by the reader. The information in our blogs is current as of the date of the drafting of the blog, and given that sometimes certain past complaints may no longer be listed in newer Brokercheck reports, some of the events referenced in some of our blogs may later on be removed from newer Brokercheck reports. Visitors may check the most recent version of each brokercheck report at www.finra.org, and may contact FINRA for the earlier version of the Brokercheck report upon which various blogs may be based.