NEW YORK, June 24, 2014 /PRNewswire/ -- Pomerantz LLP is investigating claims on behalf of investors of ITT Educational Services Inc. ("ITT" or the "Company") (NYSE: ESI). Investors are advised to contact Robert S. Willoughby at [email protected] or 888-476-6529, ext. 237.
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.
On February 26, 2014, a report published in Barron's, a business news publication announced that Consumer Financial Protection Bureau (CFPB") filed a lawsuit against ITT regarding its credit practices.
The report states that, "The CFPB's lawsuit alleges that ITT encouraged new students to enroll at ITT by providing them funding for [a] 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 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 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's CEO revealed in investor calls that converting the temporary loans to long-term loans was the company's "plan all along.""
On this news, shares of ITT fell $3.10, or more than 10.19%, on intraday trading to a price of $29.10 on February 27, 2014.
On May 22, 2014, the Company reported preliminary 2014 first quarter results and provided an update on the status of its financial statements in which it announced that the Company is withdrawing its previously-disclosed internal goals for the twelve months ending December 31, 2014, and investors should not rely on those internal goals.
On this news, shares of ITT fell $2.41, or more than 9.34%, on intraday trading to a price of $23.39 on May 22, 2014.
On June 24, 2014, ITT announced in a Securities and Exchange Commission, (SEC) Form 8-K filing, "that the Company should have consolidated the financial results of the PEAKS Trust in the Company's consolidated financial statements beginning on February 28, 2013, the Company's Audit Committee concluded that the Company will need to restate the unaudited financial statements in its Quarterly Reports on Form 10-Q for each of the fiscal quarters ended March 31, 2013, June 30, 2013 and September 30, 2013, and that those previously-issued financial statements should no longer be relied upon. Further, the preliminary financial information included in the Company's press releases issued on January 30, 2014 and May 22, 2014, and provided during the conference calls on those same days, should no longer be relied upon."
On this news, shares of ITT fell $0.60, or more than 3.52%, on intraday trading to a price of $16.44 on June 24, 2014.
The Pomerantz Firm, with offices in New York, Chicago, San Diego and Florida, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 70 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.
Robert S. Willoughby
SOURCE Pomerantz LLP