TAL Education Group - TAL Securities Fraud Class Action

TAL investors may receive additional information about the case by clicking the link "Submit Your Information" above.  If you are a member of the class described below, you may no later than April 5, 2022 move the Court to serve as lead plaintiff of the class, if you so choose.

A class action lawsuit has been filed on behalf of those who purchased or acquired TAL Education Group (“TAL”) (NYSE: TAL) American Depository Shares (“ADSs”) between April 26, 2018 and July 22, 2021, both dates inclusive (the “Class Period”).

Case Background:
TAL provides K-12 after-school tutoring services in the People’s Republic of China (“China”), mainly covering core academic subjects, including mathematics, physics, chemistry, biology, history, geography, political science, English and Chinese. As of February 28, 2021, TAL’s educational network consisted of more than 1,000 learning centers and 990 service centers in over 100 cities throughout China and one in the United States, as well as online courses and an online education platform.  In February 2018, the Chinese government released a set of regulations aimed at reining in excessive tutoring fees and limiting the perceived societal harm resulting from the ubiquity of for-profit tutoring programs such as those offered by TAL.  On the whole, the regulations were aimed at reducing disparities in school performance between relatively affluent students able to afford after-school tutoring and those that could not.  Despite the defendants’ acknowledgment that it was of material importance to investors that TAL comply with the rules, regulations and proscriptions of the Chinese government, during the Class Period TAL routinely engaged in illicit business practices designed to artificially inflate TAL’s financial results.

The truth began to emerge on April 25, 2021, when media reports revealed that the city of Beijing had fined four online education agencies, including TAL, the maximum fine of 500,000 yuan (approximately $80,000) each for misleading customers with false advertising.  Regulators found that TAL’s VIE, Beijing Xueersi Education Technology Co., Ltd., had been misrepresenting the un-discounted costs of enrollment in its courses to consumers, thereby deceiving customers into paying full price for courses that they believed they were receiving at a discount.  Then, on June 1, 2021, Chinese regulators announced they had fined 15 off-campus training institutions, including TAL, for illegal activities such as false advertising and fraud.  The offending companies, including TAL, were hit with maximum penalties for their illegal business practices, totaling a combined 36.5 million yuan ($5.73 million).  Following this news, the price of TAL ADSs dropped from $40.51 on June 1, 2021, to $33.27 on June 3, 2021, nearly an 18% decline over the two-day period.

Finally, on July 23, 2021, China unveiled a sweeping overhaul of its education sector, banning companies that teach the school curriculum from making profits, raising capital or going public. This drastic measure effectively ended any potential growth in the for-profit tutoring sector in China.  Following this news, the price of TAL ADSs fell from $20.52 on July 22, 2021, to just $4.40 on July 26, 2021, a nearly 79% decline. 

The complaint alleges that throughout the Class Period, the defendants made false and/or misleading statements and/or failed to disclose, among other things, that: (1) TAL’s revenue and operational growth was the result of deceptive marketing tactics and illicit business practices that flouted Chinese laws, regulations and policies, and exposed TAL to an extreme risk that more draconian measures would be imposed on TAL; (2) TAL had engaged in misleading and fraudulent advertising practices, including the provision of false and misleading discount information designed to obfuscate the true cost of TAL’s programs to its customers; (3) TAL had defied Chinese policies designed to alleviate the burden imposed by tutoring services on students and their families; and (4) the new rules, regulations and policies to be implemented by the Chinese government were far more severe than represented to investors by the defendants and in fact posed an existential threat to TAL and its business.

A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case.  Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.

If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP:  James Maro, Esq. (484) 270-1453 or via e-mail at info@ktmc.com.  If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.