Ahead of the Bell: Corinthian Colleges

Corinthian Colleges falls in premarket as it discloses investigation by the SEC

Associated Press

NEW YORK (AP) -- Shares of Corinthian Colleges Inc. declined in premarket trading Tuesday as the company disclosed that it is under investigation by the Securities and Exchange Commission.

In a regulatory filing, the Santa Ana, Calif., company — which runs Everest, Heald and WyoTech colleges and offers online degrees — said that it received a subpoena from the SEC on June 6. The company said that it was told it was under investigation in a letter that came with the subpoena.

Corinthian said that the subpoena requested documents and other materials related to student information in areas such as recruitment, attendance, completion, placement, defaults on federal loans and on alternative loans, as well as compliance with U.S. Department of Education financial requirements, standards and ratios, and other corporate, operational, financial and accounting matters.

Corinthian said it plans to cooperate with the SEC investigation.

In April the company said that it lost money in its fiscal third quarter, pressured by a decline in new student enrollments. New student enrollments dropped 5.7 percent to 26,738, while total student population declined 6.2 percent to 87,776.

Corinthian's stock dropped 42 cents, or 15.1 percent, to $2.37 in premarket trading 75 minutes before the market open.