NEW YORK, Sept. 19, 2012 /PRNewswire/ -- Faruqi & Faruqi, LLP, a leading national securities law firm, is investigating potential securities fraud at New Oriental Education & Technology Group ("New Oriental" or the "Company") (NYSE: EDU).
The investigation focuses on whether the New Oriental and its executives violated federal securities laws by failing to disclose that: (1) the Company improperly consolidated the earnings of a variable interest entity into its financial statements; (2) a significant number of the Company's schools and learning centers were not company-owned, but were instead operated by independent franchisees; (3) upfront franchise and other fees had artificially inflated the Company's cash balances; and (4) the Company lacked adequate internal and financial controls and as a result of the foregoing, New Oriental's financial statements were materially false and misleading.
On July 17, 2012, the Company disclosed that the Securities and Exchange Commission "had issued a formal order of investigation" as to whether the Company appropriately consolidated the earnings of Beijing New Oriental Education & Technology (Group) Co., Ltd., a variable interest entity of the Company, and its wholly-owned subsidiaries. On this news, New Oriental's share price plummeted by $7.64 or more than 34%, to close at $14.62 on July 17, 2012.
On July 18, 2012, independent securities research firm Muddy Waters, LLC issued an analyst report predicting that the Company "will have a significant restatement, and that its auditor will resign." On this news, New Oriental's share price declined by an additional $5.12 or more than 35%, to close at $9.50 on July 18, 2012.
Request more information now by clicking here: www.faruqilaw.com/EDU. There is no cost or obligation to you.
If you purchased New Oriental securities between July 21, 2009 and July 17, 2012 and would like to discuss your legal rights, visit www.faruqilaw.com/EDU. You can also contact us by calling Richard Gonnello or Francis McConville toll free at 877-247-4292 or at 212-983-9330 or by sending an e-mail to firstname.lastname@example.org or email@example.com. Faruqi & Faruqi, LLP also encourages anyone with information regarding New Oriental's conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
Attorney Advertising. The law firm responsible for this advertisement is Faruqi & Faruqi, LLP (www.faruqilaw.com). Prior results do not guarantee or predict a similar outcome with respect to any future matter. We welcome the opportunity to discuss your particular case. All communications will be treated in a confidential matter.
FARUQI & FARUQI, LLP
369 Lexington Avenue, 10th Floor
New York, NY 10017
Attn: Richard Gonnello, Esq.
Francis McConville, Esq.
Telephone: (877) 247-4292 or (212) 983-9330
SOURCE Faruqi & Faruqi, LLP