The lawsuit alleges that defendants made materially false and misleading statements to investors, describing GCU as a “non-profit” and “independent” institution while misrepresenting Grand Canyon’s role as nothing more than a third-party provider of education services. In truth, according to the lawsuit, Grand Canyon controls and effectively operates GCU, with Grand Canyon employees covertly serving as executives of GCU. Specifically, the lawsuit alleges that defendants materially failed to disclose to investors that: (1) GCU would not be and is not a proper non-profit organization as it remains under the control of Grand Canyon; (2) Grand Canyon would not be a third-party service provider to GCU but rather would and does continue to effectively operate the entity; (3) Grand Canyon employees served as executives of GCU; and (4) GCU functions as an off-balance-sheet entity to which Grand Canyon is able to funnel expenses and costs in exchange for a disproportionate amount of revenue, thereby inflating Grand Canyon’s financial results. When the true details were revealed to the market, the price of Grand Canyon stock fell significantly, causing substantial losses for investors.