An investigation on behalf of current long term investors in ITT Educational Services, Inc. (NYSE:ESI) shares over possible breaches of fiduciary duty by certain officers and directors was announced and NYSE:ESI stockholders should contact the Shareholders Foundation.
San Diego, CA -- (SBWIRE) -- 05/27/2015 -- An investigation for investors in shares of ITT Educational Services, Inc. (NYSE:ESI) was announced concerning potential breaches of fiduciary duties by certain ITT Educational Services directors and officers.
Investors who are current long term investors in ITT Educational Services, Inc. (NYSE:ESI) shares, have certain options and should contact the Shareholders Foundation at firstname.lastname@example.org or call +1(858) 779 - 1554.
The investigation by a law firm concerns whether certain ITT Educational Services officers and directors breached their fiduciary duties and caused damage to the company and its shareholders.
On June 24, 2014, ITT Educational Services 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 August 1, 2014, ITT Educational Services, Inc disclosed that on July 29, 2014, it received a notice of termination of the Agreement for Purchase and Sale of Real Estate from College Portfolio Buyer LLC. ITT Educational Services, Inc said the potential buyer, College Portfolio Buyer LLC, dropped out of the deal to sell some of the properties after ITT Educational Services, Inc refused to extend a due diligence period. On August 4, 2014, ITT Educational Services, Inc announced that Kevin M. Modany notified the Board of Directors of the Company that he intended to resign as Chief Executive Officer of the Company, effective February 4, 2015.
On September 19, 2014, ITT Educational Services, Inc. (NYSE:ESI) disclosed that on August 7, 2014, it received a notice from the staff of the Division of Enforcement (the "Staff") of the SEC, notifying the Company that the Staff had made a preliminary determination to recommend that the SEC file an enforcement action against the Company. Shares of ITT Educational Services, Inc. (NYSE:ESI) declined from over $45 per share in January 2014 to as low as $4.07 per share on September 25, 2014.
On September 30, 2014, a lawsuit was filed against ITT Educational Services, Inc over alleged securities laws violations. The plaintiff alleges that Defendants made certain allegedly false and misleading statements and failed to disclose that ITT Educational Services, Inc's financial statements contained errors related to the accounting of the PEAKS Trust and PEAKS Program, and that ITT Educational Services, Inc lacked adequate internal controls over financial reporting.
On May 12, 2015, the Securities and Exchange Commission ("SEC") announced fraud charges against ITT Educational Services Inc., its chief executive officer Kevin Modany, and its chief financial officer Daniel Fitzpatrick. The SEC alleges that ITT Educational Services, Inc and the two executives fraudulently concealed from ITT Educational Services' investors the poor performance and looming financial impact of two student loan programs that ITT financially guaranteed.
According to the SEC's complaint the underlying loan pools had performed so abysmally by 2012 that ITT Educational Services' guarantee obligations were triggered and began to balloon. The SEC alleges that rather than disclosing to its investors that it projected paying hundreds of millions of dollars on its guarantees, ITT Educational Services inc and its management took a variety of actions to create the appearance that ITT Educational Services' exposure to these programs was much more limited and that over the course of 2014 as ITT Educational Services began to disclose the consequences of its practices and the magnitude of payments that ITT Educational Services would need to make on the guarantees, ITT Educational Services' stock price declined dramatically.
Indeed, shares of ITT Educational Services, Inc. (NYSE:ESI) declined from $45.27 per share in January 2014 to as low as $1.93 per share on May 13, 2015.
Those who purchased shares of ITT Educational Services, Inc. (NYSE:ESI) have certain options and should contact the Shareholders Foundation.
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