Shareholder rights law firm Robbins LLP announces that it is investigating Grand Canyon Education, Inc. (NASDAQ: LOPE) for alleged violations of the Securities Exchange Act of 1934 and whether the Company's officers and directors breached their fiduciary duties to shareholders. Grand Canyon provides education services to colleges and universities in the United States.
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Grand Canyon Education, Inc. (LOPE) Artificially Inflates its Profitability
In July 2018, Grand Canyon spun-off of its education assets through a sale to non-profit entity, Grand Canyon University ("GCU"). Following this spin-off, Grand Canyon consistently touted growth in net income and adjusted EBITDA. However, on September 9, 2019, Citron Research published a report revealing that it believed Grand Canyon "[had been] stuffing GCU with expenses to inflate its own profitability and as a result bankrupting GCU." About two months later, Grand Canyon announced its application for GCU's designation as a non-profit had been denied by the U.S Department of Education ("DOE"). Then, on January 28, 2020, Citron Research expanded on the DOE's findings, stating that Grand Canyon was the "educational Enron" that used its non-reporting subsidiary to "dump expenses and liabilities, while receiving a disproportionate amount of revenue at inflated margins…to artificially inflate the stock price." Following these disclosures, Grand Canyon's stock price fell $30.40, or 26%, to close at $84.07 per share on January 28, 2020.
Grand Canyon Education, Inc. (LOPE) Shareholders Have Legal Options
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