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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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June 24, 2015
14:40 EDTESIITT Educational responds to Rohit Chopra letter
Nicole Elam, vice president of government relations and external affairs for ITT Educational Services, issued the following statement in response to a letter from Rohit Chopra, former student loan ombudsman for the Consumer Financial Protection Bureau, to investors dated June 24, 2015: "Putting aside the troubling fact that Mr. Rohit Chopra is attempting to impact investors of a publicly traded company with information he received while in an official capacity at a U.S. governmental agency, his letter is a perfect example of the myopic view pervading some in D.C. regarding taxpaying educational institutions. The fact that he would write such a letter to investors days after leaving the Consumer Financial Protection Bureau trumpeting mere allegations against the company demonstrates a personal bias against our institutions and an unwillingness to allow for due process to work, the cornerstone of the U.S. legal system. Allegations are not facts and we think our investors will not take action based on simple assertions from someone with an ideological axe to grind."
10:40 EDTESIITT Educational says CSAAVE suspension put on hold by judge
ITT Educational issued a public notice, dated June 23, stating that the California State Approving Agency for Veterans Education, a division of the California Department of Veterans Affairs, previously issued a suspension of approval to all 15 California institutions owned and operated by ITT Educational, doing business as ITT Technical Institute. "On June 23, 2015, the Honorable Judge William Claster of the Orange County Superior Court issued an order staying CSAAVE’s suspension of approval of ITT’s courses for enrollment by veteran students, pending the Court’s adjudication of ITT’s petition for peremptory writ of mandate on or after August 21, 2015. While this stay is in effect, CSAAVE’s suspension of ITT’s courses for enrollment by veteran students is lifted...While the suspension is stayed, veterans may enroll at ITT," the company stated in its notice. Reference Link
June 16, 2015
05:56 EDTESIStocks with implied volatility below IV index mean; KORS ESI
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