Eleventh Circuit Affirms Dismissal of Shareholder Complaint against Strayer Education
On December 13, 2012, the U.S. Court of Appeals for the Eleventh Circuit affirmed the dismissal with prejudice of a shareholder class action complaint against Strayer Education and certain of its officers. Wilson Sonsini Goodrich & Rosati represented Strayer in connection with the matter.
The plaintiff alleged that the defendants violated federal securities laws by making false or misleading statements regarding Strayer's recruiting and enrollment practices, as well as Strayer's business prospects. The U.S. District Court for the Middle District of Florida dismissed the complaint with prejudice, finding that the plaintiff had failed adequately to allege facts showing any false or misleading statement, facts giving rise to the required strong inference of scienter, or facts showing that the purported fraud caused the plaintiff's claimed investment losses. On appeal, the Eleventh Circuit held that the plaintiff did not allege facts sufficient to plausibly infer that the purported fraud was the proximate cause of the plaintiff's claimed investment losses. This alone was sufficient to affirm the district court's dismissal with prejudice.