According to a press release November 03, 2010, the complaint alleges that throughout the Class Period, defendants issued materially false and misleading statements regarding the Company’s business and financial results. Specifically, defendants failed to disclose that: (i) the Company had engaged in improper and deceptive recruiting and financial aid lending practices and, due to the government’s scrutiny into the for-profit education sector, the Company would be unable to continue these practices in the future; (ii) the Company failed to maintain proper internal controls; (iii) many of the Company’s programs were in jeopardy of losing their eligibility for federal financial aid; and (iv) as a result of the foregoing, defendants’ statements regarding the Company’s financial performance and expected earnings were false and misleading and lacked a reasonable basis when made.
On August 13, 2010, after the market closed, the U.S. Department of Education released data on federal student-loan repayment rates at the nation’s colleges and universities. The data showed that repayment rates were 54% at public colleges and 56% at private non-profit institutions, compared to just 36% at for-profit colleges. Specifically, the data showed that the repayment rate at ITT was just 31%. On this news, the price of ITT stock dropped 14.61%, or $9.40 per share, from a closing price of $64.33 per share on August 13, 2010 to a closing price of $54.93 per share on August 16, 2010, the following trading day.
On December 14, 2010, the court consolidated three related cases under 10cv8323. On January 24, 2011, Judge Victor Marrero granted the motion to appoint the Wyoming Retirement System as lead plaintiff and approved its selection of Robbins Geller Rudman & Dowd LLP as lead counsel. The lead plaintiff filed a Consolidated Class Action Complaint on April 1, 2011. The defendants responded by filing a motion to dismiss on June 10, 2011.
On March 30, 2012, Judge Victor Marrero granted the defendants' motion to dismiss.
On May 4, 2012, Judge Victor Marrero signed the Decision and Order granting the defendants' motion to dismiss and further ordered the Clerk of Court to terminate any pending motions and to close this case.