A federal judge in Virginia has tossed out a lawsuit brought by investors who claimed they were duped by overly optimistic statements put forward in 2013 by the for-profit education provider K12 Inc., shortly before the company’s stock plunged.
U.S. District Judge Anthony J. Trenga cited evidence of a “lack of managerial competence” in the Herndon, Va.-based company’s faulty predictions of growth in student enrollment, but found nothing that showed the company violated securities law by purposely misleading the public.
The lawsuit against K12 was brought by the Oklahoma Firefighters Pension and Retirement System, whose members maintained that executives made misleadingly optimistic public statements during 2013 about enrollment in the online provider’s schools, when in fact there were signs that the company would miss its targets.
