May 9, 2008   CAREER EDUCATION: Settlement in Illinois Suit Yet to be Approved A tentative settlement in the consolidated class action, "In re:  Career Education Corp. Securities Litigation, Case No. 1:03-cv- 08884," has yet to receive court approval. The case, which was filed in the U.S. District Court for the  Northern District of Illinois, represents the consolidation into  one suit of six purported class action complaints filed between  Dec. 9, 2003, and Feb. 5, 2004, by and on behalf of certain  purchasers of the company's common stock, against the company;  John M. Larson, a former officer of CEC; and Patrick K. Pesch, a  current officer of the company. The lawsuit alleged that, in violation of Section 10(b) of the  U.S. Securities Exchange Act of 1934 and Rule 10b-5 promulgated  thereunder, the defendants made certain material  misrepresentations and failed to disclose certain material facts  about the condition of the company's business and prospects  during the putative class period, causing the respective  plaintiffs to purchase shares of the company's common stock at  artificially inflated prices. The plaintiffs further claimed that Messrs. Larson and Pesch  were liable as control persons under Section 20(a) of the  Exchange Act. On March 29, 2007, the court granted the defendants' motion to  dismiss the suit for failure to state a claim and dismissed with  prejudice the plaintiffs' third amended consolidated complaint. The plaintiffs appealed the District Court's dismissal of their  third amended consolidated complaint to the U.S. Court of  Appeals for the Seventh Circuit on April 24, 2007. The parties have subsequently reached an agreement to settle the  plaintiffs' claims on appeal.  This settlement is subject to the  case being remanded by the Court of Appeals to the District  Court and the approval by the District Court after notice to  potential class members.  The company reported no further development in the matter in its  May 5, 2008 Form 10-Q filing with the U.S. Securities and  Exchange Commission for the quarter ended March 31, 2008.  The suit is "In re: Career Education Corp. Securities  Litigation, Case No. 1:03-cv-08884," filed with the U.S.  District Court for the Northern District of Illinois, Judge Joan  Humphrey Lefkow presiding. Representing the company are:          Karl Richard Barnickol, Esq.          Mary Ellen Hennessy, Esq.          Joni S. Jacobsen, Esq.          David H. Kistenbroker, Esq.          Katten Muchin Zavis Rosenman          525 West Monroe Street, Suite 1600          Chicago, Il 60661-3693          Phone: 312-902-5200
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