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founder Russ Whitney, the Company’s business model, its “educational” products, its

financial results, its compliance with Generally Accepted Accounting Principles

(“GAAP”) and its internal controls. The statements and omissions were made with

knowledge or severe recklessness of their falsity in order to artificially inflate the price of

Whitney common stock. As a result of defendants’ scheme, plaintiff and the members

of the Class, who purchased Whitney common stock at artificially inflated prices, were

damaged when the true, concealed facts were ultimately revealed to the market in two

press releases and the stock price dropped.

  • B.

    The Parties

    • 1.

      Plaintiff

Plaintiff Arnold Friedman purchased common stock of Whitney during the Class

Period. He alleges that the purchase was at an artificially-inflated price due to

defendants’ actions. See CAC at ¶ 3.

2. The Whitney Defendants

a.

Whitney is a Colorado corporation with its principal place of business located in

Cape Coral, Florida. According to the CAC, the Company’s profile, posted during the

Class Period on Yahoo.com stated that Whitney provides “post-secondary educational

and training courses” for students in the United States, Canada, the United Kingdom,

and Costa Rica. The Company offers non-accredited introductory workshops, primary

and advanced courses, and training in the fields of real estate and financial markets

education. The Company’s courses provide instruction in “real estate investing,

business strategies, stock market investment techniques, cash management, asset

4

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