NEW YORK, April 3, 2022 /PRNewswire/ — Pomerantz LLP announces that a class action lawsuit has been filed against New Oriental Education & Technology Group Inc. (“New Oriental” or the “Company”) (NYSE:EDU) and certain of its officers. The class action, filed in United States District Court for the Southern District of new Yorkand registered under number 22-cv-01876, is in the name of a class consisting of all persons who have purchased new Eastern American Depository Stock (“ADS”) between April 24, 2018 and July 22, 2021both dates inclusive (the “Class Period”), seeking to pursue remedies under the Securities Exchange Act of 1934 (the “Exchange Act”) against New Oriental and certain of the Company’s senior officers and directors .
If you are a shareholder who purchased or otherwise acquired New Oriental ADSs during the Class Period, you have until April 5, 2022 ask the court to name you as the lead plaintiff for the class. A copy of the complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at [email protected] or 888.476.6529 (or 888.4-POMLAW), toll free, Ext. 7980. Those applying by email are encouraged to include their mailing address, phone number and number of shares purchased.
[Click here for information about joining the class action]
New Oriental provides educational programs, services and products to students through the People’s Republic of China (“Chinaor the “PRC”) and offers online courses through its online learning platforms. In the early 2000s, the company entered the tutoring business after K-12 school. Additionally, in 2005 , New Oriental launched its online education services through its Koolearn The company now provides comprehensive online education services through its subsidiary, Koolearn Technology Holding Limited.
In February 2018, the Chinese government has issued a set of regulations aimed at limiting excessive tutoring fees and limiting the perceived societal harm resulting from the pervasiveness of for-profit tutoring programs such as those offered by New Oriental. Among other changes, the regulations prohibited after-school tutoring institutions from offering courses beyond the curriculum and curricula applicable to respective primary and secondary students, from offering courses designed to improve exam and to link school enrollment to tutoring results. Overall, the regulations were intended to reduce disparities in academic performance between relatively well-off students who were able to afford tutoring after school and those who could not.
Because New Oriental operates in a highly regulated industry within China, the impact of new laws and regulations affecting the Chinese tutoring industry and the Company’s compliance with the Chinese regulatory framework and governmental prerogatives are of significant importance for investors. In fact, New Oriental has recognized the material importance of maintaining strict compliance with Chinese laws, regulations and government prerogatives. In New Oriental’s Form 20-F filed with the SEC on September 16, 2020New Oriental said the company “continually strives to comply with the requirements of these regulations and implementations” governing after-school tutoring activities imposed by the Chinese government, and any failure to do so may “affect significantly and negatively [New Oriental’s] business and results of operations.”
The Complaint alleges that, throughout the Class Period, the Defendants made materially false and misleading statements regarding the company’s business, operations and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) New Oriental’s revenues and operational growth were the result of deceptive marketing tactics and abusive business practices that undermined Chinese regulations and policies and put the company at extreme risk of more drastic measures being imposed on the Company; (ii) New Oriental had engaged in deceptive and fraudulent advertising practices, including providing false and misleading information about discounts designed to hide the true cost of the Company’s programs for its customers; (iii) New Oriental falsified teachers’ qualifications and experience in order to attract clients and increase student enrollment; (iv) New Oriental had defied earlier government warnings against linking school enrollment to the provision of private tutoring services; (v) as a result of the foregoing, New Oriental was subject to an undisclosed tail risk of adverse enforcement action, regulatory fines and penalties, and the imposition of new rules and regulations adverse to the business and interests of the Company; (vi) new rules, regulations and policies to be implemented by the Chinese government as a result China the annual “Two Sessions” parliamentary meetings were far harsher than those represented to investors by the Defendants and in fact posed an existential threat to the Company and its business; and (vii) as a result of the foregoing, defendants’ positive statements about the company’s business, operations and prospects were materially misleading and lacked a reasonable factual basis.
At April 25, 2021the media revealed that Beijing City had fined four online education agencies, including the subsidiary of New Oriental Koolearn, the maximum fine of 500,000 yuan (approximately $80,000) each for misleading customers with false advertisements regarding course prices.
At May 12, 2021news reports revealed that an impending Chinese government crackdown on the tutoring industry would be broader and more drastic than previously publicly known, including that regulators had already taken adverse action against New Oriental and other for-profit tutoring companies.
At this news, the price of New Oriental’s ADS fell $2.77 per ADS, i.e. 19.4%, over the next two trading sessions to close at $11.51 by ADS on May 132021.
At June 1, 2021Chinese regulators announced they had fined fifteen off-campus educational institutions, including New Oriental, for illegal activities such as false advertising and fraud.
At this news, the price of New Oriental’s ADS fell $1.77 per ADS, i.e. 16%, over the next two trading sessions to close at $9.32 by ADS on June 32021.
Then, on July 23, 2021, China unveiled a sweeping overhaul of its education sector, prohibiting companies that teach the school curriculum from making a profit, raising capital or going public, ending any potential growth of the for-profit tutoring sector in China.
At July 25, 2021New Oriental released an “update” on the new regulations, which stated that the company “will comply with relevant rules and regulations when providing educational services” and “expects these measures to have an adverse impact important on its after school tutoring services related to academic subjects in China compulsory education system. »
At this news, the price of New Oriental’s ADS fell $4.46 per ADS, i.e. nearly 70%, over the next two trading sessions to close at $1.94 by ADS on July 26, 2021.
Pomerantz LLP, with offices in new York, Chicago, Los Angeles, Parisand Tel Aviv, is recognized as one of the leading law firms in the areas of corporate litigation, securities and antitrust. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues the tradition he established, fighting for the rights of victims of securities fraud, breaches of fiduciary duty and corporate misconduct. The firm recovered numerous multimillion-dollar damages on behalf of class members. See www.pomlaw.com
Robert S. Willoughby
888-476-6529 ext. 7980
See original content to download multimedia: https://www.prnewswire.com/news-releases/shareholer-alert–pomerantz-law-firm-reminds-shareholders-with-losses-on-their-investment-in- new-oriental-education–technology-group-inc-of-class-action-lawsuit-and-prochain-date-limite–edu-301516291.html
SOURCE Pomerantz LLP