The lawsuit, filed by Hagens Berman, targets the period between May 11 and August 9, 2026. During the Q1 earnings call on May 11, management touted a 19.5% increase in student starts, prompting them to raise annual guidance to a 10% to 14% range. This narrative of sustained demand initially pushed shares up 10.6%.

Confidence evaporated on August 10 when the company disclosed that student start growth had slowed to just 1%. The sudden shift wiped out over $300 million in market capitalization. Reed Kathrein, the Hagens Berman partner leading the investigation, stated the firm is scrutinizing whether Lincoln Educational intentionally misled the market about these key performance metrics. The deadline for investors to serve as lead plaintiff is November 10, 2026.