We have filed a class action suit on behalf of purchasers of ITT Educational Services, Inc. (ESI) common stock during the period between April 22, 2010 and February 25, 2013.
On February 22 , 2013, after the market closed, ITT filed its Form 10-K with the SEC for its fiscal year ended December 31, 2012. The Form 10-K disclosed that the SEC was investigating ITT’s involvement in some private student-loan agreements. ITT revealed that it had received a subpoena from the SEC on February 8, 2013, along with a letter informing the Company of the investigation. The subpoena issued by the SEC requested documents related to a 2009 loan risk-sharing agreement and ITT’s PEAKS Private Student Loan Program (“PEAKS Program”). As a result of this news, ITT’s stock plunged $3.10 per share to close at $15.53 per share on February 25, 2013, a one-day decline of nearly 17% on volume of over 1.7 million shares.
According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) the Company failed to properly account for the 2009 loan risk-sharing agreement and its PEAKS Program; and (b) the Company failed to maintain proper internal controls to ensure that risk-sharing agreements were properly recorded.