Stride Sued in Federal Securities Class Action Over Alleged 'Ghost Students' Scheme

Overview

• The case, MacMahon v. Stride, Inc., No. 1:25-cv-02019, alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act.
• Plaintiffs claim Stride inflated enrollment by keeping nonattending students on rolls and disregarded staffing limits, background checks, licensure rules, and federally mandated special-education services.
• The complaint further alleges suppression of whistleblowers and contends that weak customer experience hurt retention and conversions.
• Stride disclosed on October 28 that poor customer experience caused an estimated 10,000–15,000 fewer enrollments and a muted outlook, after which the stock fell about 54 percent in one day; a September report had earlier preceded an ~11 percent drop.
• Law firms including Bleichmar Fonti & Auld, Bronstein Gewirtz & Grossman, and Robbins Geller are notifying investors of the class period spanning October 22, 2024 through October 28, 2025.