Oklahoma Police Pension & Retirement System, Oklahoma City, was named lead plaintiff in a class-action lawsuit against Education Management Corp., alleging the company defrauded investors by issuing misleading statements about its growth and potential profits.
The lawsuit, filed in U.S. District Court in Pittsburgh, claimed the company’s stock fell 18% in August once its true financial status was made public. It claims the misleading statements were made during Education Management’s IPO in October 2009, according to a news release from the system’s legal counsel, Berman DeValerio.
The $1.6 billion Oklahoma Police system said it lost $426,000 on its investment with the company.
U.S. Magistrate Robert C. Mitchell on Wednesday granted the pension fund lead-plaintiff status.
Education Management spokeswoman Jacquelyn P. Muller could not immediately be reached for comment.