Chitwood & Harley, LLP Announces Securities Fraud Class Action Suit for Purchasers of ITT Securities with Expanded Class Period
ATLANTA--(BUSINESS WIRE)--March 31, 2004--Chitwood & Harley announces that it has filed a class action lawsuit in the United States District Court for the Southern District of Indiana against ITT Educational Services Inc. ("ITT" or the "Company")(NYSE: ESI). The suit alleges claims on behalf of a class consisting of purchasers of the publicly traded securities of ITT between October 17, 2002 and March 9, 2004, inclusive (the "Class Period"). Previously, an investor filed suit alleging a class period from April 17, 2003 through February 24, 2004. Although different class periods are alleged, the cases will likely be consolidated. After a lead plaintiff is appointed, a consolidated amended complaint will be filed. When the consolidated amended complaint is filed, Lead Plaintiff and Lead Counsel will allege the class period that will be operative in the consolidated proceeding, based on the facts then available from their continuing investigation.
The suit is brought against ITT, Rene R. Champagne, Omer E. Waddles, and Kevin M. Modany. The civil action number is 1:04-CV-0380DFH-TAB. The deadline for filing lead plaintiff papers is April 26, 2004. If you wish to discuss this action or have any questions concerning this notice or your rights with respect to this matter, you may contact Cleo Anderson at 1-888-873-3999 (toll-free) or by e-mail at csa@classlaw.com who will attempt to answer your questions without cost or obligation. You may also contact us through our website, www.classlaw.com by clicking on "ITT." Any member of the purported class may move the Court to serve as lead plaintiff through counsel of his or her choice, or may choose to do nothing and remain an absent class member. A copy of the complaint is available from the court and can be viewed on our website.
The Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market during the Class Period. The Complaint alleges that the defendants Class Period statements were materially false and misleading because the Company failed to disclose and/or misrepresented: 1) that the Company falsified vital statistics submitted to the federal government in support of its eligibility under Title IV of the Higher Education Act of 1965; 2) that the Company derived a material portion of its revenue from federal grants and financial aid payments secured through false information submitted to the government; and 3) that the Company's reported financial results were not prepared in accordance with Generally Accepted Accounting Principles and did not fairly present the Company's financial condition and results of operations. Additionally, the Complaint alleges that the Company failed to disclose that the State of California was conducting an investigation of the Company since October 2002, which was unrelated to a previously disclosed investigation of recruitment compensation that was conducted by the Department of Education.
On February 24, 2004, ITT shocked the market by announcing that it had been served with a search warrant and related grand jury subpoenas. The Company reported that the search warrant and subpoenas relate 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 stock was halted for about two hours pending release of this news. After trading resumed, the market reacted swiftly to the news in the following days, pushing the price of ITT stock down nearly 35% to close at $37.26 on February 26, 2004 on extremely heavy trading volume. Moreover, on March 9, 2004, the Company disclosed in an SEC filing, for the first time, that it had been under investigation by the California Attorney General since October 2002. ITT stock dropped another 6% after this news was released.
Chitwood & Harley LLP is a class action firm that concentrates its practice in representing victims of securities fraud and corporate mismanagement, as well as other complex litigation. Chitwood & Harley has been appointed lead counsel in major actions throughout the United States and has been instrumental in recovering billions of dollars on behalf of its clients. Clients and courts alike have praised the results achieved by Chitwood & Harley. Recently, the federal judge in In re BankAmerica Securities Litigation, which resulted in the highest recovery in 2002 in a securities class action, commented favorably on counsel's performance stating: "Class members were well served by experienced attorneys who, through considerable time and effort, obtained a significant recovery for their clients," and, "(a)s the Court has remarked throughout this litigation, class counsel ... have performed at exceptionally high levels, and all parties have been exceedingly well represented."
For more information about Chitwood & Harley, please visit our website at www.classlaw.com or contact Cleo Anderson at 1-888-873-3999 (toll-free), by e-mail at csa@classlaw.com, or at 1230 Peachtree Street, Suite 2300, Atlanta, Georgia 30309.
Contacts
Chitwood & Harley, Atlanta
Cleo Anderson, Esq., 888-873-3999
404-873-3900 ext. 6829
csa@classlaw.com
www.classlaw.com
