Company: Zovio Inc. f/k/a Bridgepoint Education, Inc.
Class Period: March 8, 2016 — March 7, 2019
Court: U.S.D.C. – Southern District of California
A shareholder class action complaint has been filed against Zovio Inc. f/k/a Bridgepoint Education, Inc. (“Bridgepoint”) on behalf of investors who purchased shares of the Company’s stock between March 8, 2016 and March 7, 2019 (the “Class Period”).
The complaint alleges that the defendants made false and misleading statements and/or failed to disclose material adverse information to investors during the Class Period concerning the Company’s business, operations and compliance policies. Specifically, the defendants failed to disclose or indicate that: (1) Bridgepoint’s processes for recording revenue for its Corporate Full Tuition Grant (“FTG”) program were inaccurate; (2) Bridgepoint maintained deficient internal controls; and (3) due to the foregoing deficiencies, Bridgepoint was prone to and did commit material accounting errors related to revenue, provision for bad debts, accounts receivable and deferred revenue, which resulted in the overstatement of revenue and expenses;
According to the complaint, on March 7, 2019, Bridgepoint announced that it had “determined to restate the Company’s previously issued unaudited condensed consolidated financial statements, and advised that those financial statements should not be relied upon, for the three and nine months ended September 30, 2018.” Additionally, Bridgepoint reported that the processes used for recording revenue for the FTG program portion of its student contracts “were not designed with sufficient precision,” leading to “material” accounting errors related to revenue, provision for bad debts, accounts receivable and deferred revenue, which resulted in the overstatement of revenue and expenses. Following this news, shares of the Company’s stock fell $3.21 per share, or over 34%, to close on March 7, 2019 at $6.22 per share.
Bridgepoint stockholders who purchased shares of the Company’s stock before March 7, 2019 are encouraged to contact Kaskela Law LLC at (888) 715 – 1740, or by completing the information form on this page, for additional information about this action and their legal rights and options.