New Oriental Education & Technology Group Inc. - EDU Securities Fraud Class Action

New Oriental 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 New Oriental Education & Technology Group Inc. (“New Oriental”) (NYSE: EDU) American Depository Shares (“ADSs”) between April 24, 2018 and July 22, 2021, both dates inclusive (the “Class Period”).

Case Background:
New Oriental provides educational programs, services and products to students across the People’s Republic of China (“China”) and delivers online courses through its online learning platforms. New Oriental delivers its educational programs, services and products to students across China through its network of schools, learning centers and bookstores, as well as pure-play online learning platforms. As of September 24, 2021, New Oriental had a physical network of more than 120 schools and 1,500 learning centers in over 100 cities and approximately 54,200 teachers.

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 New Oriental.  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.  The complaint alleges that, despite the defendants’ acknowledgment that it was of material importance to investors that New Oriental comply with the rules, regulations and proscriptions of the Chinese government, during the Class Period New Oriental routinely engaged in illicit business practices designed to artificially inflate the Company’s financial results.

The truth began to emerge on June 1, 2021, when Chinese regulators announced they had fined 15 off-campus training institutions, including New Oriental, for illegal activities such as false advertising and fraud. Among the violations were reportedly fabricating teacher qualifications, exaggerating the effects of training, and fabricating user reviews. The regulators gave one example of a New Oriental teacher who was advertised as having three years teaching experience that in fact had only been teaching for five months.  Following this news, the price of New Oriental ADSs dropped from $11.09 on June 1, 2021, to $9.32 on June 3, 2021, a 16% decline over the two-day period.

Then, 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 New Oriental ADSs fell from $6.40 on July 22, 2021 to just $1.94 by market close on July 26, 2021, a nearly 70% 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) New Oriental’s revenue and operational growth was the result of deceptive marketing tactics and abusive business practices that flouted Chinese regulations and policies and exposed New Oriental to an extreme risk that more draconian measures would be imposed on New Oriental; (2) New Oriental had engaged in misleading and fraudulent advertising practices, including the provision of false and misleading discount information designed to obfuscate the true cost of New Oriental’s programs to its customers; (3) New Oriental had falsified teacher qualifications and experience in order to attract customers and increase student enrollments; and (4) as a result of the foregoing, New Oriental was subject to an extreme undisclosed risk of adverse enforcement actions, regulatory fines and penalties, and the imposition of new rules and regulations adverse to New Oriental’s business and interests.

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.