Your Baby Can LLC announced the decision on its website.
"Regretfully, the cost of fighting recent legal issues has left us with no option but to cease business operations," the notice says.
"While we vehemently deny any wrongdoing, and strongly believe in our products, the fight has drained our resources to the point where we can no longer continue operating."
A complaint against the company was filed with the Federal Trade Commission in April 2011 by the Boston-based Campaign for a Commercial-Free Childhood, which has led a series of campaigns against what critics call the "genius baby" industry. The advocacy group said Your Baby Can Read's claims of teaching infants to read were false and deceptive, and asked the FTC to halt the ads.
Susan Linn, director of the Campaign for a Commercial-Free Childhood, welcomed the demise of Your Baby Can Read, but urged the FTC to press ahead with an investigation.
"The commission has in its power to force Your Baby Can to provide compensation for parents who were deceived," she said Monday. "Even more important, taking action will deter other companies from making deceptive claims about the educational value of screen media for babies."
Betsy Lordan, an FTC public affairs officer, said the commission would not comment on the complaint against Your Baby Can Read. As a general policy, she added, an investigation does not automatically cease if a company goes out of business.
Your Baby Can Read — consisting of interrelated videos, flash cards and books — was developed in the late 1990s by Robert Titzer, an educator with a Ph.D. in human performance from Indiana University. More than a million families have used the products since then, according to the Carlsbad, Calif.-based company, which advertised it extensively on TV, at exhibitions, and on its own website, Facebook page and YouTube channel.
The website had claimed the best time for children to learn to read is when they are infants and toddlers, before they go to school; it said they could start as young as 3 months old. "Seize this small window of opportunity," it urged parents.
The complaint filed with the FTC rejected this "window of opportunity" claim, as well as many of the other assertions in the ads.
The deluxe version of Your Baby Can Read sold on the company website for $200; less expensive versions were available in stores. The videos ranged up to 30 minutes in length, and parents were urged to let their infants watch them twice a day over a period of several months.
The company website now consists only of the brief closure announcement, and includes an email address for questions about existing orders. There was no immediate reply to an email asking for comment about the closure.
Your Baby Can Read: http://www.yourbabycanread.com/
Campaign for a Commercial-Free Childhood: http://www.commercialfreechildhood.org/
David Crary can be followed on Twitter at http://twitter.com/CraryAP