INDIANAPOLIS, March 3, 2004 (PRIMEZONE) -- An investor sued ITT Educational Services, Inc. (NYSE:ESI) today, claiming the company and three top officers issued misleading financial statements, Berman DeValerio Pease Tabacco Burt & Pucillo announced.
The class action was filed in the U.S. District Court for the Southern District of Indiana. It seeks damages for violations of federal securities laws on behalf of all investors who bought ITT common stock from April 17, 2003, through and including February 24, 2004 (the "Class Period").
Berman DeValerio has represented investors in class actions since 1982. To receive a copy of the complaint, you may contact the court, call the firm at (800) 516-9926 or go to the firm's website at www.bermanesq.com.
The lawsuit claims that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder, including U.S. Securities and Exchange Commission (SEC) Rule 10b-5.
The complaint names as defendants the company; Rene R. Champagne, who was at all relevant times the chief executive officer and chairman of the board of directors; Omer E. Waddles, who served as the company's president, chief operating officer and director throughout the Class Period; and Kevin M. Modany, who was the company's senior vice president and chief financial officer during the Class Period.
According to the complaint, the defendants materially misrepresented ITT's financial condition during the Class Period, causing the company's stock to trade at artificially high prices.
Specifically, ITT touted its strong financial performance and consistent growth in revenue, earnings and student enrollment. In reality, the lawsuit says, ITT's statements were false and misleading because the company failed to disclose that it had falsified a variety of statistics submitted to the federal government in order to continue its eligibility under Title IV of the Higher Education Act of 1965 and record revenue from federal education aid programs, thereby artificially inflating its reported financial performance.
On February 25, 2004, ITT shocked the investing public by announcing that it had been served with a search warrant and related grand jury subpoenas. ITT reported that the search warrant and subpoenas related to information and documentation concerning placement, retention, graduation and attendance figures, as well as recruitment and admissions materials, student grades, graduate salaries and transferability of credits to other institutions.
Trading in ITT's stock was halted for approximately two hours pending release of this news. After trading resumed, ITT's stock price plummeted approximately 33% from a closing price of $57.40 on February 24, 2004 to a close of $38.50 on February 25, 2004.
If you purchased ITT Educational Services Incorporated common stock from April 17, 2003, through and including February 24, 2004, you may wish to contact the following attorneys at Berman DeValerio Pease Tabacco Burt & Pucillo to discuss your rights and interests.
Nicole R. Starr, Esq.
Michael T. Matraia, Esq.
One Liberty Square
Boston, MA 02109
(800) 516-9926
law@bermanesq.com
If you wish to apply to be lead plaintiff in this action, a motion must be filed on your behalf with the court no later than April 26, 2004. You may contact the attorneys at Berman DeValerio to discuss your rights regarding the appointment of lead plaintiff and your interest in the class action. You may also retain counsel of your choice. To be a member of the class, however, you need not take any action at this time.
Berman DeValerio Pease Tabacco Burt & Pucillo prosecutes class actions nationwide on behalf of institutions and individuals, chiefly victims of securities fraud, antitrust law violations, and consumer fraud. The firm consists of 34 attorneys in Boston, San Francisco and West Palm Beach, Florida.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca