Pomerantz LLP is investigating claims on behalf of investors of TAL Education Group ("TAL" or the "Company"). The investigation concerns whether TAL and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.
On June 13, 2018, Muddy Waters issued a report entitled "TAL Education: A Real Business with Fake Financials," asserting that TAL "has been fraudulently overstating its profits since at least FY2016." Citing an extensive review of Chinese government documents, site visits, and numerous interviews, the report asserts that "TAL combines the old school Chinafraud playbook of simply penciling in more favorable numbers with the more sophisticated asset parking fraud of Enron." According to the report, between fiscal years 2016 and 2018, TAL overstated its operating profit by at least 21.6%, its pre-tax profit by at least 39.8%, and its net income by at least 43.6%. Following publication of the Muddy Waters report, TAL's American depositary receipt price fell sharply during intra-day trading on June 13, 2018.