BENSALEM, Pa.--(BUSINESS WIRE)--Law Offices of Howard G. Smith announces that a class action lawsuit has been filed on behalf of investors who purchased New Oriental Education & Technology Group Inc. (“New Oriental” or the “Company”) (NYSE: EDU) American Depositary Shares (“ADSs” or “shares”) between April 24, 2018 and July 22, 2021, inclusive (the “Class Period”). New Oriental investors have until April 5, 2022 to file a lead plaintiff motion.
Investors suffering losses on their New Oriental investments are encouraged to contact the Law Offices of Howard G. Smith to discuss their legal rights in this class action at 888-638-4847 or by email to howardsmith@howardsmithlaw.com.
On May 12, 2021, media reported that the impending crackdown by the Chinese government on the online education industry would be more drastic than previously reported. Anticipated regulations included banning on-campus tutoring classes and weekend tutoring, as well as industry-wide fee limitations.
On this news, New Oriental’s ADSs fell 20% to close at $11.51 per share on May 13, 2021.
Then, on June 1, 2021, Chinese regulators announced that they had fined New Oriental and 14 other off-campus training institutions for false advertisement and fraud, including fabricating teacher qualifications, exaggerating the effects of training, and fabricating user reviews. New Oriental was accused of faking the teaching experience of 74% of teachers surveyed. New Oriental had also been accused of providing false pricing information, engaging in false publicity and price fraud, and failing to honor its contractual commitment to students.
On this news, the price of New Oriental’s ADSs dropped 16% to close at $9.32 per share on June 3, 2021, thereby injuring investors further.
Then, on July 23, 2021, China unveiled a sweeping overhaul of its education sector, banning for-profit teaching and tutoring companies. On July 25, 2021, New Oriental responded that complying with the new regulations would “have a material adverse impact on its after-school tutoring services.”
On this news, New Oriental’s shares fell 70% to close at $1.94 per ADS on July 26, 2021, thereby injuring investors further.
The complaint alleges that defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (1) New Oriental’s revenue and operational growth was the result of deceptive marketing tactics and abusive business practices that flouted Chinese regulations and policies and exposed New Oriental to an extreme risk that more draconian measures would be imposed on New Oriental; (2) New Oriental had engaged in misleading and fraudulent advertising practices, including the provision of false and misleading discount information designed to obfuscate the true cost of New Oriental’s programs to its customers; (3) New Oriental had falsified teacher qualifications and experience to increase student enrollments; (4) New Oriental had defied prior government warnings against linking school enrollments with the provision of private tutoring services; (5) as a result, New Oriental was subject to an extreme undisclosed risk of adverse enforcement actions, regulatory fines and penalties, and the imposition of new rules and regulations adverse to New Oriental’s business and interests; (6) the new rules, regulations, and policies to be implemented by the Chinese government following the Two Sessions parliamentary meetings were far more severe than represented to investors by defendants and in fact posed an existential threat to New Oriental and its business; and (7) as a result of the foregoing, Defendants’ public statements were materially false and misleading at all relevant times.
If you purchased New Oriental shares, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020, by telephone at (215) 638-4847, toll-free at (888) 638-4847, or by email to howardsmith@howardsmithlaw.com, or visit our website at www.howardsmithlaw.com.
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