An investor filed a lawsuit on behalf of all persons who purchased or acquired Corinthian Colleges, Inc. (NASDAQ:COCO) securities during the period from October 30, 2007 through including August 19, 2010, over alleged violations of Federal Securities Laws by Corinthian Colleges. Meanwhile an investigation on behalf of current long term investors of Corinthian Colleges, Inc. (NASDAQ:COCO), also including those who purchased prior to October 2007 Corinthian Colleges, Inc. (NASDAQ:COCO) shares and continue to hold those shares, over possible breaches of fiduciary duty by the Corinthian Colleges board of directors was announced.

According to the complaint filed in the United States District Court for the Central District of California the plaintiff alleges on behalf of all persons who purchased or acquired Corinthian Colleges, Inc. (NASDAQ:COCO) securities during the period from October 30, 2007 through including August 19, 2010, that Santa Ana, California based Corinthian Colleges, Inc and certain of its officers violated the Securities Exchange Act of 1934 by issuing between October 30, 2007 through including August 19, 2010, false and/or misleading statements, as well as by failing to disclose material adverse facts about its business, operations, and prospects.

On August 4, 2010, the Senate Health, Education, Labor, and Pensions Committee conducted a hearing on for-profit education firms, where Government Accountability Office representative, George Kutz, presented the findings of report GAO-10-948T, 'For-Profit Colleges: Undercover Testing Finds Colleges Encouraged Fraud in Deceptive and Questionable Marketing Practices.' The report detailed undercover investigations into 15 for-profit schools that uncovered misconduct by school staff. According to this GAO study, the college personnel at schools may have encouraged applicants to falsify their financial aid forms to qualify for federal aid and pressured applicants to sign a contract for enrollment prior to allowing them to speak to a financial advisor.

Corinthian Colleges, Inc. reported on June 30, 2006 for the past 12 months Total Revenue of $907.82million, on June 30, 2007 Total Revenue of $919.22million, on June 30, 2008, Total Revenue of $1.068.67billion, and on June 30, 2009, Total Revenue of $1.30783billion. Its Net Income went during the same time frame from $42.48million to $68.76million.

As a result of the revelations in connection to the investigation by the Congressional Committee, the Companys stock (COCO) fell from $9.25 on August 02, 2010 to $4.49 on August 20, 2010, when it declined nearly 17%, so the lawsuit.