Bottini & Bottini, Inc. served as lead counsel for Plaintiff Amy Cook in a shareholder derivative action filed in federal court in Chicago. The case was filed on December 22, 2011, and alleged, among other things, that since April 2007 and/or thereafter, the individual defendants breached their fiduciary duties as directors and/or officers of Career Education by causing the Company (stock ticker: "CEC") to violate federal and state law regarding the representations made by CEC to the public and to students regarding student job placement, and by knowingly or recklessly failing to implement or maintain effective internal controls to ensure that the Company complied with applicable laws and regulations, including Title IV of the Higher Education Act of 1965, 20 U.S.C. ยงยง 1070, et seq. The complaint also alleges that the individual defendants breached their fiduciary duties by causing the Company to publish misleading statements regarding student job placement rates and the adequacy of the Company's internal controls. The complaint seeks damages and injunctive relief.
On October 25, 2013, Plaintiff Cook settled the case in exchange for a payment of $20 million cash from defendants' insurance carriers to the Company. In addition, the Company agreed to adopt and implement wide-ranging corporate governance changes to enhance the functioning of the Company's board of directors. The settlement is being presented to the judge in the case (the Hon. John W. Darrah) for preliminary approval on October 31, 2013. The final approval hearing will be on January 22, 2014. Documents relevant to the settlement can be viewed on this webpage under the "Settled Cases" link.