ITT Educational Services, Inc. ("ITT" or the Company) provides postsecondary degree programs in the United States in various fields, including business, criminal justice, information technology, electronics technology, drafting and design, and nursing and health sciences.

The original Complaint alleges that the Company's Class Period representations regarding its quarterly performance, made in press releases and SEC filings, were each materially false and misleading because they failed to disclose that : (1) ITT had systematically falsified records, such as those relating to enrollment, graduation and job placement rates, in order to artificially inflate its reported operational and financial performance; (2) a material portion of the Company's reported revenues were derived through fraudulent business practices, such as federal grants and financial aid payments that were secured through falsified records; (3) the Company's reported results did not accurately portray the Company's operations because a material portion of those results were attributable to prohibited practices; and (4) that the Company's results were not prepared and reported in accordance with generally accepted accounting principles and did not fairly present its actual financial results or condition.

The Complaint further alleges that on February 25, 2004, before the opening of ordinary trading, the Company issued a press release announcing that it had been served with a search warrant and related grand jury subpoenas at its corporate headquarters and several of its schools. In reaction to this announcement, the price of ITT common stock plummeted, falling from $57.40 per share on February 24, 2004 to close at $38.50 on February 25, 2004 -- a one-day drop of 33% on unusually heavy trading volume.

According to a press release dated November 10, 2005, on September 14, 2005, the United States District Court for the Southern District of Indiana dismissed without prejudice all of the claims against all of the Defendants in the consolidated securities class action lawsuit filed against the Company and ten of its current and former directors and executive officers. The Plaintiffs did not file an amended Complaint within the period permitted by the court and the court dismissed the Complaint with prejudice on October 24th 2005.