Oregon Public Employee Retirement Fund, Salem, is seeking lead plaintiff status in a federal class-action lawsuit against Apollo Group Inc., charging the owner of the University of Phoenix and other for-profit colleges with securities fraud, said James Sinks, spokesman for the $51 billion fund.
The pension fund lost about $10 million it had invested in Apollo Group through its investments in the S&P and Russell index funds, which include Apollo.
The lawsuit filed in U.S. District Court in Arizona, alleges that Apollo Group and some of its executives violated federal securities laws, claiming that it misrepresented its income by not accounting for losses caused by student withdrawals from classes. After the alleged misrepresentations were disclosed in an October 2009 SEC filing, Apollo stock dropped to an average closing price of $58 per share in the 90 days after the disclosure from $72.97 per share price before the disclosure.
“Apollo Group takes its disclosure obligations very seriously and intends to defend this lawsuit vigorously,” Manny Rivera, Apollo Group spokesman, wrote in a statement.