An Education Management investor filed a lawsuit on behalf of purchasers of the common stock of Education Management Corp (NASDAQ:EDMC) between October 2, 2009 and August 3, 2010, against Education Management Corporation over alleged violations of Federal Securities Laws. Meanwhile an investigation on behalf of current long term investors of Education Management Corp (NASDAQ:EDMC), including also those who purchased prior to October 2009 and continue to hold those EDMC shares, over possible breaches of fiduciary duties by certain officers and directors of Education Management Corp. was announced.

According to the complaint filed in the United States District Court for the Western District of Pennsylvania the plaintiff alleges on behalf of purchasers of the common stock of Education Management Corp between October 2, 2009 and August 3, 2010, that Education Management Corp (NASDAQ:EDMC) violated the Securities Exchange Act of 1934 by issuing a series of materially false and misleading statements related to its business and operations, and violated the Securities Act of 1933 by issuing a materially false and misleading registration statement and proxy-prospectus in connection with the October 2, 2009 Initial Public Offering. The investigation on behalf of behalf of current long term investors in Education Management Corp (NASDAQ:EDMC)seeks to determine whether certain officers and directors of Education Management breached their fiduciary duties in connection with the alleged securities laws violations.

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 owned by Education Management Corp. 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. During the U.S. Senate Health, Education, Labor, and Pensions Committee hearing, GAO representative George Kutz identified Argosy University as one of the schools subject to the investigation. As an apparent result of this report, so the investigation, Education Management's stock dropped to a fifty-two week low. Shares of Education Management Corp (NASDAQ:EDMC) traded recently at $14.37per share, down from its 52weekHigh of $26.98 per share and almost $43 per share during 2006.