On April 10, 2018, Pomerantz LLP was appointed Lead Counsel in a class action lawsuit against RYB Education, Inc. (“RYB” or the “Company”) (NYSE:RYB) and certain of its officers. The class action, filed in United States District Court, for the Southern District of New York, and docketed under 17-cv-09261, is on behalf of a class consisting of all persons other than defendants who purchased or otherwise acquired RYB’s American Depositary Receipts (“ADRs”): (1) pursuant and/or traceable to RYB’s false and misleading Registration Statement and Prospectus, issued in connection with the Company’s initial public offering on or about September 27, 2017 (the “IPO” or the “Offering”); and/or (2) on the open market between September 27, 2017 and November 22, 2017, both dates inclusive (the “Class Period”), seeking to recover damages caused by defendants’ violations of the Securities Act of 1933 (the “Securities Act”) and the Securities Exchange Act of 1934 (the “Exchange Act”).
If you are a shareholder who purchased RYB securities between September 27, 2017, and November 22, 2017, both dates inclusive, you have until January 26, 2018, to ask the Court to appoint you as Lead Plaintiff for the class. To discuss this action, contact Robert S. Willoughby at email@example.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and amount of shares purchased.
RYB Education, Inc. offers educational services. The Company operates kindergarten and pre-schools. RYB Education provides training in a variety of subjects and languages, teacher recruitment, guidance, innovative learning, development of children, rating systems, parents consulting, and other services.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) RYB failed to establish safety policies to prevent sexual abuse from occurring at its schools; (ii) RYB’s failure to remedy problems within its system exposed children to harm and unreasonable risk of harm while in the Company’s care; and (iii) as a result of the foregoing, RYB securities traded at artificially inflated prices during the Class Period, and class members suffered significant losses and damages.
On November 24, 2017, various news outlets reported that police have opened an investigation into RYB after numerous parents accused a RYB nursery of drugging and molesting their children. Beijing’s education authority confirmed the police investigation in a statement. According to China’s leading newspaper Xinhua News Agency, RYB has suspended multiple teachers at RYB Education New World after kindergarten students were “reportedly sexually molested, pierced by needles, given unidentified pills,” and forced to undress and locked in a dark room. Parents reported that at least eight children have been abused at the school and that the children had given similar accounts with respect to their abuse.
On this news, RYB’s ADR price fell $10.28 per share, or over 38% from its previous closing price, to close at $16.45 per share on November 24, 2017.
On the following day, several news outlets reported that Chinese police had detained teachers in connection with its RYB’s child abuse inquiry. According to police reports, one of the teachers was arrested after needle wounds were found on at least eight children aged 2 to 6 years at the kindergarten. In a statement issued later that day, RYB announced it had fired the detained teachers, as well as the head of one of its kindergartens.