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News Breaks
February 25, 2013
11:45 EDTESIITT Educational sinks after disclosing SEC probe
For-profit educational company ITT Educational (ESI) is tumbling after the company disclosed late Friday in a regulatory filing that it is being investigated by the SEC. The SEC subpoenaed, among other things, documents related to two private student loan programs launched by ITT, the company stated. The first private loan program was launched by ITT with an "unaffiliated entity" in 2009 and included a risk sharing agreement between the entity and ITT. The SEC also subpoenaed information related to the PEAKS Private Student Loan Program, which ITT initiated in 2010. Under the PEAKS program an unaffiliated lender provided loans to ITT students, and then sold the loans to a trust. ITT Educational agreed to guarantee the trust's debt, the company stated. In a note to investors earlier today, Wells Fargo analyst Trace Urdan reported that critics have said that ITT has not set aside enough money for both of these programs, and that the company should include liabilities from the programs on its balance sheet. If the SEC agrees with these conclusions, ITT may be forced to sell additional stock in order to provide sufficient collateral for its loans under federal law, Urdan wrote. Furthermore, the Department of Education may determine that the funds which ITT obtained from the loan programs should not qualify as independent cash tuition payments under the 90/10 rule. This rule requires for-profit education companies to obtain at least 10% of their revenue from sources other than the federal government. Under either of the scenarios, ITT students may be temporarily unable to obtain student loans, Urdan wrote, but added that he doesn't expect this scenario to occur. The analyst maintained a Market Perform rating on the stock, which sank $2.50, or 13.5%, to $16.05 in late morning trading.
News For ESI From The Last 14 Days
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March 26, 2015
16:39 EDTESIBlum Capital lowers stake in ITT Educational to 5% from 6.1%
March 18, 2015
07:33 EDTESIITT Educational receives notice from NYSE on late filing status
ITT Educational Services announced that it did not file its Annual Report on Form 10-K for the fiscal year ended December 31, 2014 on or before the due date of March 16, 2015. The company has received a notice from the NYSE that the company is subject to the NYSE's procedures under its timely filing criteria as a result of the company's failure to file the 2014 Form 10-K by the due date. Under NYSE rules, the company has six months from March 16, 2015 to file the 2014 Form 10-K. Until the company files the 2014 Form 10-K and all other periodic reports with subsequent due dates, its common stock will remain listed on the NYSE under the symbol "ESI," with a "LF" indicator to signify late filing status. The company can regain compliance with the NYSE listing standards during the six-month period once it files the 2014 Form 10-K with the SEC, but only if it has also filed all other periodic reports with subsequent due dates. The company is still evaluating the full impact of the consolidation of the 2009 Entity on these matters, and therefore cannot provide any assurance that the consolidation of 2009 Entity will not have a material negative impact on these matters, which could result in a material adverse effect on the company's results of operations, financial condition and/or cash flows. Further, the company did anticipate that it may be in noncompliance with certain covenants under its financing agreement.
March 17, 2015
17:31 EDTESIITT Educational files to delay Form 10-K
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