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News Breaks | | | | February 25, 2013 | | 11:45 EDT |  | ESI | ITT 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. | |
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News For ESI From The Last 14 Days Check below for free stories on ESI the last two weeks. |
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| May 17, 2013 | | 12:52 EDT |  | ESI | ITT Educational spikes higher, levels to watch
The shares have essentially moved sideways for much of the week, but today spiked in the later morning, now up over 10% to $27.28. At that price, next resistance is at $28.63. Support is at $26.06. | | | May 15, 2013 | | 10:13 EDT |  | ESI | On The Fly: Analyst Downgrade Summary
 Subscribe for More Information | | | 06:34 EDT | | ESI | ITT Educational downgraded to Equal Weight from Overweight at First Analysis
Subscribe for More Information | | | May 14, 2013 | | 12:00 EDT | | ESI | ITT Educational rises 14.7%
Subscribe for More Information | | | May 13, 2013 | | 09:01 EDT | | ESI | ITT Educational falls 3.3%
Subscribe for More Information | | | May 10, 2013 | | 10:01 EDT |  | ESI | House GOP proposes reform of student loan interest rates, The Hill says
Subscribe for More Information | | | May 8, 2013 | | 13:59 EDT | | ESI | For-profit education stocks rally after Grand Canyon results
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