Facts

Lead Plaintiff Babulal Tarapara filed a putative shareholder class action against K12 Inc. and certain of its officers.

PLAINTIFFS' CONTENTIONS: Plaintiffs alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, 15 U.S. C. Sections 78j(b) and 78t(a), and Rule 10b-5 against defendants. Specifically, in the second amended complaint, plaintiff alleged that K12 failed to disclose that one of its partner schools, the Agora Cyber Charter School, had given K12 notice in June 2012 that Agora was exercising its rights under the parties' public school management contract to avoid the contract's automatic renewal.

DEFENDANTS' CONTENTIONS: Defendants denied the allegations and asserted numerous defenses.

Result

The parties reached a settlement, with defendants agreeing to pay $3.5 million into an interest-bearing escrow account for the settlement class, which is composed of shareholders who purchased shares of K12 between October 10, 2013 and October 27, 2015.