According to the law firm press release, the complaint charges ITT and certain of its officers and directors with violations of the Securities Exchange Act of 1934. ITT is a provider of post-secondary degree programs in the United States.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business and financial results in press releases, analyst conference calls and filings with the SEC, specifically with respect to the Company’s compliance with relevant accounting standards when reporting its risk-sharing activities in loan programs. As a result of defendants’ false statements, ITT stock traded at artificially inflated prices during the Class Period, reaching a high of $112.69 per share on April 22, 2010.
On February 22 , 2013, after the market closed, ITT filed its Form 10-K with the SEC for its fiscal year ended December 31, 2012. The Form 10-K disclosed that the SEC was investigating ITT’s involvement in some private student-loan agreements. ITT revealed that it had received a subpoena from the SEC on February 8, 2013, along with a letter informing the Company of the investigation. The subpoena issued by the SEC requested documents related to a 2009 loan risk-sharing agreement and ITT’s PEAKS Private Student Loan Program (“PEAKS Program”). As a result of this news, ITT’s stock plunged $3.10 per share to close at $15.53 per share on February 25, 2013, a one-day decline of nearly 17% on volume of over 1.7 million shares.
According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) the Company failed to properly account for the 2009 loan risk-sharing agreement and its PEAKS Program; and (b) the Company failed to maintain proper internal controls to ensure that risk-sharing agreements were properly recorded.
Plaintiffs filed a consolidated complaint on October 7, 2013. This was followed by a corrected version of that Complaint on October 11.
On November 2, 2015, the parties filed a Stipulation of Settlement. This Settlement was preliminarily approved by the Court on November 23. On March 8, 2016, the Court granted final approval of the Settlement and dismissed this case.