Hagens Berman Investigates Stride (LRN) Over Allegations of Fraud and Technology Failure

Hagens Berman, a national shareholder rights law firm, is alerting investors in Stride, Inc. (NYSE: LRN) about the crucial deadline of January 12, 2026, to seek the appointment as lead plaintiff in an ongoing securities class action lawsuit. The firm is encouraging investors who have experienced significant losses in LRN to reach out and discuss their legal rights.

Details of the Allegations Against Stride (LRN)

The lawsuit arises from the alleged disclosure of two fraudulent schemes involving inflated enrollment figures and a severe failure of Stride's technology platform. The impact of these revelations has led to a staggering 54% decline in the stock price in a single day, resulting in billions lost in market capitalization.

Misleading Statements and Corporate Practices

According to the lawsuit, Stride and its executives allegedly provided misleading information regarding the company's core business metrics and overall operational integrity. CEO James Rhyu's acknowledgment of the technology upgrade failure—which contributed to a poor customer experience—contradicted previous claims of sustainable growth.

Specific Allegations of Fraud

• Enrollment Fraud: Stride purportedly manipulated enrollment figures by maintaining "Ghost Students" (students who either never officially enrolled or were absent for extended periods), which artificially inflated key metrics and profit margins.
• Technology Failure: Serious issues with a critical platform upgrade were allegedly concealed, restricting access for an estimated 10,000 to 15,000 enrolled students and stunting growth.

Financial Impact of the Allegations

The initial revelation concerning the inflated enrollment figures led to an 11% drop in the stock price. Following further disclosures about the technology failure, Stride's sales growth forecast was revised downward to just 5%, a significant decrease from its historical growth rate of 19%. This resulted in a catastrophic 54% crash of the stock, dramatically affecting investor confidence.

Seeking Accountability: Class Period and Investor Rights

The class action complaint aims to recover losses for investors who purchased LRN securities during the Class Period from October 22, 2024, to October 28, 2025. The lawsuit seeks to hold Stride and its executives accountable for their alleged misrepresentations of the company's operational stability and business metrics.

Next Steps for Affected Investors

Reed Kathrein, the lead partner at Hagens Berman, is advising investors who bought LRN securities and suffered financial losses to take action before the lead plaintiff deadline. Interested investors should consider contacting Hagens Berman at 844-916-0895 or via email at LRN@hbsslaw.com.

Whistleblower Information

Individuals with non-public information regarding Stride are encouraged to come forward to assist the investigation. Whistleblowers may qualify for rewards under the SEC Whistleblower program, potentially receiving up to 30% of any recovery achieved by the SEC as a result of their information.

About Hagens Berman

Hagens Berman is a globally recognized plaintiffs’ rights complex litigation firm dedicated to corporate accountability. With a strong track record, the firm has successfully secured over $2.9 billion for investors and other affected parties harmed by corporate misconduct. For more information, please visit hbsslaw.com and stay updated on their efforts on social media at @ClassActionLaw.