Shareholder Class Action Filed Against ITT Educational Serv.
TO BUSINESS AND LEGAL AFFAIRS EDITORS:
BALA CYNWYD, Pa., Feb. 27 /PRNewswire/ -- The following statement was issued today by the law firm of Schiffrin & Barroway, LLP:
Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Southern District of Indiana on behalf of purchasers of ITT Educational Services, Inc. (NYSE: ESI) ("ITT/ESI" or the "Company") publicly traded securities during the period between October 16, 2003 and February 25, 2004, inclusive (the "Class Period").
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Schiffrin & Barroway, LLP (Marc A. Topaz, Esq. or Stuart L. Berman, Esq.) toll-free at 1- or 1-, or via e-mail at .
The complaint charges ITT/ESI, Rene R. Champagne and Kevin M. Modany with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. More specifically, the complaint alleges that throughout the Class Period, ITT/ESI issued multiple press releases highlighting the Company's increasing financial performance and the continued robust demand for its educational programs. The Company also disclosed in its filings with the Securities & Exchange Commission ("SEC") during the Class Period that a substantial portion of the tuition paid by its students comes from federal education aid programs, which the Company's schools are authorized to offer. These statements, however, were materially false and misleading because they failed to disclose: (1) that the statistics that the Company provided to the government in order to continue its eligibility in offering Title IV programs were inaccurate; (2) that defendants' actions would result in reputational harm to the Company's schools and possible disqualification of the Company's students from future participation in federal education aid programs; and (3) that as a result, defendants' positive statements concerning the Company's future prospects were lacking in a reasonable basis when made.
As defendants continued to issue positive statements about the Company and its future prospects, shares of the Company's stock steadily increased. Throughout this period, ITT/ESI insiders took advantage of the artificial inflation in the Company's stock and sold approximately $8,455,385 of their personally held shares to the unsuspecting public at artificially inflated prices.
On February 25, 2004, ITT/ESI shocked the market when it announced that federal agents had raided the Company's corporate headquarters in Indianapolis. The agents carried search warrants that were issued from a grand jury probe by the Southern District of Texas. According to the Company, the investigation involved grand jury subpoenas of records concerning student placement, retention, graduation, attendance, recruitment, grades, graduates' salaries and transfers of students' credits to other colleges.
Trading was halted throughout the morning. When trading resumed, shares of the Company's stock fell to $38.50 per share, a decline of $18.90 per share, or approximately 33%, on extremely high trading volume.
Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin & Barroway, which prosecutes class actions in both state and federal courts throughout the country. Schiffrin & Barroway is a driving force behind corporate governance reform, and has recovered in excess of a billion dollars on behalf of institutional and high net worth individual investors. For more information about Schiffrin & Barroway, or to sign up to participate in this action online, please visit http://www.sbclasslaw.com.
If you are a member of the class described above, you may, not later than April 26, 2004, move the Court to serve as lead plaintiff of the class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements. You may retain Schiffrin & Barroway, LLP, or other counsel of your choice, to serve as your counsel in this action.
CONTACT: Schiffrin & Barroway, LLP
Marc A. Topaz, Esq.
Stuart L. Berman, Esq.
, Bala Cynwyd, PA 19004
or Or by e-mail at
SOURCE Schiffrin & Barroway, LLP