Grand Canyon Education Investor Suit Should Fail, Per Magistrate

Grand Canyon Education Inc. should get a quick exit from an investor suit alleging it made misleading statements about its accounting and a purported nonprofit spinoff, a federal magistrate judge in Delaware said.

Investor allegations that the education services company, which previously ran Grand Canyon University as a for-profit Christian college, acted knowingly or recklessly don’t “amount to a logically cogent theory,” so their claims should be dismissed, according to a magistrate judge’s report and recommendation in the U.S. District Court for the District of Delaware.

The investors argued that when GCE made the challenged statements about its plan to ...