An investigation on behalf of investors in shares of Education Management Corp (NASDAQ:EDMC) over possible Violations of Securities Laws by Education Management Corporation and certain of its officers and directors was announced.

The investigation by a law firm focuses on possible NASDAQ:EDMC shareholder claims based on potential violations of the federal securities laws. Specifically, the investigation concerns on whether certain officers and directors at Education Management Corporation (NASDAQ: EDMC) possibly breached their fiduciary duty.

Education Management Corp has reported impressive financial performance. Education Managements 12months Total Revenue rose over the past four filing periods from $1.68billion to $2.88billion and its Net Income increased from $65.99million to $229.50million.

Shares of Education Management Corp (Public, NASDAQ:EDMC) have surged from as low as $8.25 per share in September 2010 to as high as over $26 in July 2011.

However, shares of Education Management Corp (Public, NASDAQ:EDMC) fell from over $26 mid July to under $17 during Tuesday, August 9, 2010 trading.

On August 8, 2011 it was reported that the U.S. Department of Justice, several states, and two whistle-blowers from the company filed an amended complaint against Education Management alleging violations of the False Claims Act and seeking monetary remedy for unjust enrichment. The lawsuit was originally filed in 2007. The Department of Justice said Education Management and students enrolled in its institutions have received more than $11 billion in federal funds since 2003. On May 3, 2011, a qui tam action filed under the federal False Claims Act in April 2007 was unsealed due to the U.S. Department of Justices decision to intervene in the case. Several of the states, listed on the case caption have joined the case based on qui tam actions filed under their respective state False Claims Acts. The complaint was filed by a former admissions representative at The Art Institute of Pittsburgh Online Division and a former director of training at Online Higher Education.
In a statement, Education Management said the pursuit of this legal action by the federal government and a handful of states was flat out wrong.

Despite that lawsuit Education Management faces a series of other legal challeges outlined in the following.
On March 22, 2011, Education Management received a subpoena from the Office of Inspector General of the U.S. Department of Education requesting documents related to satisfactory academic progress standards and state licensing of online programs offered by South University and The Art Institute of Pittsburgh for the time period beginning January 1, 2006 through the date of the subpoena
In December 2010, Education Management Corp received a subpoena from the Office of Consumer Protection of the Attorney General of the Commonwealth of Kentucky requesting documents and detailed information for the time period of January 1, 2008 through December 31, 2010.
In October 2010, Argosy University received a subpoena from the Florida Attorney Generals office seeking a wide range of documents related to Education Managements institutions, including the nine institutions located in Florida, from January 2, 2006 to the present.

In August 2010, a securities class action lawsuit was filed against Education Management Corp, certain of its executive officers and directors, and certain underwriters of its initial public offering. The plaintiff alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Exchange Act of 1934 due to allegedly false and misleading statements in connection with the Education Managements initial public offering and its subsequent press releases and filings with the U.S. Securities and Exchange Commission.

On May 6, 2010, another qui tam action filed under the False Claims Act also 2007 was unsealed due to the U.S. Department of Justices decision to not intervene in the action at that time.