NEW YORK, Feb. 28, 2014 /PRNewswire/ -- Morgan & Morgan announces that it is investigating claims on behalf of investors of ITT Educational Services, Inc. ("ITT Educational" or the "Company") (ESI). The investigation concerns whether ITT and certain of its officers and/or directors have violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
If you own shares of ITT Educational and want more information about the investigation, please contact George Pressly, Esq. at 1(800) 631-6234 or email George at AskGeorge@morgansecuritieslaw.com.
On February 26, 2014, Barron's published a report that the Consumer Financial Protection Bureau ("CFPB") filed a lawsuit against ITT Educational regarding its credit practices.
The report states that, "The CFPB's lawsuit alleges that ITT Educational encouraged new students to enroll at ITT Educational by providing them funding for this tuition gap with a zero-interest loan called 'Temporary Credit.' This loan typically had to be paid in full at the end of the student's first academic year. But ITT Educational knew from the outset that many students would not be able to repay their Temporary Credit balances or fund their next year's tuition gap."
"The CFPB lawsuit alleges that between July 2011 and December 2011, ITT [Educational] pushed its students into repaying their Temporary Credit and funding their second-year tuition gaps through high-cost private student loan programs. Students were left in the dark about the fact that taking out these high-cost loans would be required to continue their studies. However, ITT Educational's CEO revealed in investor calls that converting the temporary loans to long-term loans was the company's 'plan all along.'"
Following this news, shares of ITT Educational fell $3.10, or more than 9%, to close at $32.40 on February 26, 2014.
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