BENSALEM, Pa.--(BUSINESS WIRE)--Law Offices of Howard G. Smith announces that a class action lawsuit has been filed in the United States District Court for the Southern District of Indiana on behalf of purchasers of the securities of ITT Educational Services Inc. (“ITT” or the “Company”) (NYSE:ESI) between February 26, 2013 and September 18, 2014, inclusive (the “Class Period”). ITT provides postsecondary degree programs in the United States in various fields, including business, criminal justice, information technology, electronics technology, and nursing and health sciences.
The Complaint alleges that defendants made false and/or misleading statements and failed to disclose material adverse facts about the Company’s business, operations and prospects, including material information concerning two private education loan programs for its students. Specifically, defendants misrepresented and/or failed to disclose that: (1) the Company had failed to consolidate the financial results of the PEAKS Trust into ITT’s financial results; (2) the Company’s financial statements contained errors related to the accounting of the PEAKS Trust and PEAKS Program; (3) the Company had improperly accounted for its guarantee obligations under the PEAKS program; (4) as a result, the Company’s financial results were overstated; (5) the Company lacked adequate internal and financial controls; and (6), as a result of the foregoing, ITT’s financial statements were materially false and misleading at all relevant times.
On September 19, 2014, the Company filed a Form 8-K with the Securities and Exchange Commission and disclosed that on August 7, 2014, the Company received a “Wells Notice” from the Securities and Exchange Commission, Division of Enforcement, notifying the Company that the division Staff had made a preliminary determination to recommend that the SEC file an enforcement action against the Company. According to the Company, the Staff informed ITT that “the enforcement action would allege violations of Sections 10(b), 13(a) and 13(b)(2) of the Securities Exchange Act of 1934,” and various Rules promulgated under the Exchange Act.” Following this news, the price of ITT shares dropped 35%, or $2.70 per share, to close at $4.95 per share on September 19, 2014.
If you are a member of the Class described above, you have until December 1, 2014, to move the Court to serve as lead plaintiff, if you meet certain legal requirements. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you wish to learn more about this action, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020 by telephone at (215) 638-4847, Toll Free at (888) 638-4847, or by email to howardsmith@howardsmithlaw.com, or visit our website at http://www.howardsmithlaw.com.