Lerach Coughlin Stoia Geller Rudman & Robbins LLP Files Class Action Suit Against Apollo Group, Inc

Business Wire, Oct 18, 2004

SAN DIEGO -- Lerach Coughlin Stoia Geller Rudman & Robbins LLP ("Lerach Coughlin") (http://www.lerachlaw.com/cases/apollo/) today announced that a class action has been commenced in the United States District Court for the District of Arizona on behalf of purchasers of Apollo Group, Inc. ("Apollo") (NASDAQ:APOL) common stock during the period between February 27, 2004 and September 14, 2004 (the "Class Period").

If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from October 12, 2004. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, William Lerach or Darren Robbins of Lerach Coughlin at 800/449-4900 or via e-mail at wsl@lerachlaw.com. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.lerachlaw.com/cases/apollo/. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.

The complaint charges Apollo and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Apollo provides higher education to working adults. The Company operates through its subsidiaries The University of Phoenix, Inc., University of Phoenix Online ("UOP"), Institute for Professional Development ("IPP"), The College for Financial Planning Institutes Corporation and Western International University, Inc.

The Complaint alleges that during the Class Period defendants disseminated materially false and misleading financial statements. The true facts, which were known by each of the defendants but concealed from the investing public during the Class Period, were as follows: (a) that contrary to the implication that there was no merit to the allegations in a qui tam action concerning the Company's illegal compensation structure, the Company in fact did illegally compensate certain of its employees who were involved with the recruitment of new students; (b) that the Company was generating revenues through illegal means which ultimately resulted in a fine by the Department of Education ("DOE"), the largest fine ever paid to date; (c) that the "strong growth" in enrollment in Q2 2004 was attributable to illegal compensation activities; and (d) that defendants inflated the Company's student enrollment by signing up "unqualified" students.

On September 7, 2004, it was disclosed that Apollo had reached an agreement with the DOE to pay $4.4 million to settle a five-year-old audit in possible compensation-related rule violations at IPP and $9.8 million to settle a separate review of similar regulatory issues at its UOP unit. Then, on September 15, 2004, The Wall Street Journal published an article regarding the DOE report which criticized the Company for having a "culture of duplicity" in which recruiters' compensation was tied to enrollment numbers. The Company's stock price dropped sharply on these disclosures.

Plaintiff seeks to recover damages on behalf of all purchasers of Apollo common stock during the Class Period (the "Class"). The plaintiff is represented by Lerach Coughlin, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.

Lerach Coughlin, a 140-lawyer firm with offices in San Diego, San Francisco, Los Angeles, New York, Boca Raton, Washington, D.C., Houston, Philadelphia and Seattle, is active in major litigations pending in federal and state courts throughout the United States and has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of human rights violations. Lerach Coughlin lawyers have been responsible for more than $20 billion in aggregate recoveries. The Lerach Coughlin Web site (http://www.lerachlaw.com) has more information about the firm.