We are investigating TAL Education Group (TAL) (“TAL” or the “Company”) for potential violations of the federal securities laws.
On April 7, 2020, post-market, TAL announced that it had uncovered certain employee wrongdoing during the Company’s routine internal auditing process. Specifically, TAL discovered irregularities and violations of the Company’s business conduct and internal control policies by an employee in the Company’s newly introduced “Light Class” business, after which TAL immediately reported the wrongdoing to the local police, and the employee was taken into custody. Based on the Company’s routine internal audit, the Company suspects the employee at issue of conspiring with external vendors to inflate “Light Class” sales by forging contracts and other documentation. For the fiscal year 2020 ended February 29, 2020, “Light Class” sales accounted for approximately 3% to 4% of the Company’s total estimated revenues. On this news, TAL’s share price fell sharply during pre-market and intraday trading on April 8, 2020, damaging investors.