K12 is a technology-based education company that offers proprietary curriculum, software systems and educational services for kindergarten through the 12th grade. The Company provides educational content to students through online schools and by direct sales to school districts.

The Complaint alleges that defendants, the Company and certain of its officers, made materially false and misleading statements during the Class Period regarding the Company’s business and financial results. Specifically, the Complaint alleges that defendants made material misstatements and failed to disclose that it had engaged in deceptive student recruiting practices, as well as improper academic assessment practices in order to increase the Company’s student enrollment and revenues. These material misrepresentations and omissions artificially inflated the price of the Company’s stock price throughout the Class Period.

When, on December 12, 2011, The New York Times reported that K12 had engaged in improper practices at its primary virtual charter schools, the price of the Company’s stock dropped $9.89, or more than 34%, per share on unusually heavy volume. The Company’s stock price declined further in the following days as the market digested the news about K12′s improper practices, dropping from a closing price of $28.79 per share on December 12, 2011 to a closing price of $18.90 per share on December 16, 2011.

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