The Complaint alleges that, throughout the Class Period, Defendants made false and misleading statements and failed to disclose that: (i) New Oriental Education’s revenue and operational growth was the result of deceptive marketing tactics and abusive business practices that flouted Chinese regulations and policies and exposed New Oriental Education to an extreme risk that more draconian measures would be imposed on New Oriental Education; (ii) New Oriental Education had engaged in misleading and fraudulent advertising practices, including the provision of false and misleading discount information designed to obfuscate the true cost of New Oriental Education’s programs to its customers; (iii) New Oriental Education had falsified teacher qualifications and experience to increase student enrollments; (iv) New Oriental Education had defied prior government warnings against linking school enrollments with the provision of private tutoring services; (v) as a result, New Oriental Education was subject to an extreme undisclosed risk of adverse enforcement actions, regulatory fines and penalties, and the imposition of new rules and regulations adverse to New Oriental Education’s business and interests; (vi) the new rules, regulations, and policies to be implemented by the Chinese government following the Two Sessions parliamentary meetings were far more severe than represented to investors by Defendants and in fact posed an existential threat to New Oriental Education and its business; and (vii) consequently, Defendants’ positive statements about New Oriental Education’s business, operations, and prospects were materially misleading and lacked a reasonable factual basis.