ITT Educational Down 4% on Law Firm Investigation
ITT Educational Services Inc. (ESI) has been facing various litigation processes lately. Recently, The Rosen Law Firm, P.A. began investigating whether the company has issued inaccurate statement regarding its true financial position and prospects. As a result, share prices declined 4%.
Rosen Law Firm is one of the many law firms, who are already investigating potential claims against ITT Educational for any violation of the federal securities laws. Some of these investigations also concern if the company has provided inaccurate statements regarding its true financial position. Some of the firms investigating ITT Educational include Pomerantz LLP, Johnson & Weaver, LLP, Levi & Korsinsky and Law Offices of Howard G. Smith.
On Sep 19, ITT Educational Services’ share price plummeted a massive 35% as the company declared in a U.S. Securities and Exchange Commission (SEC.TO) filing that SEC’s Division of Enforcement Staff has preliminarily determined to recommend an enforcement action against the company by SEC. SEC has been investigating the company regarding its two private education loan programs offered to its students. The recommendation may involve civil enforcement action or administrative proceedings against the company.
ITT Educational has already been under the scanner by SEC as the company has failed to file its earnings results since the fourth quarter of 2013 owing to uncertainty related to the accounting treatment of the PEAK Private Student Loan Program in the company’s financial statements.
In addition, ITT Educational withdrew its previously provided guidance for 2014 on May 22 as the company could face restrictions in terms of student financial aid funding. All of these uncertainties that loom over the education company have hurt investor confidence.
ITT Educational carries a Zacks Rank #3 (Hold).
Stocks in the education industry that are currently performing well include GP Strategies Corp. (GPX), Grand Canyon Education, Inc. (LOPE) and Apollo Education Group, Inc. (APOL). While GP Strategies sports a Zacks Rank #1 (Strong Buy), Grand Canyon Education and Apollo Education both carry a Zacks Rank #2 (Buy).
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