ITT Says Top Management Cleared in Probe
Friday June 24, 6:17 pm ET
ITT, Top Management Cleared by DOJ; Probe Continues Into Local Issues at Certain Schools
CARMEL, Ind. (AP) -- ITT Educational Services Inc. said Friday it received a letter from the government that a nationwide criminal investigation of its campuses found no evidence of wrongdoing by the company or its senior management.
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The U.S. Attorney's Office in Houston, which was leading the probe into records falsification on behalf of the Justice Department, said in a letter that it would not pursue executives at the headquarters level of ITT Educational Services Inc. However, the letter asked for continued cooperation "as the investigation of the conduct of other individuals continues."
The technical school operator told the Securities and Exchange Commission that some 70 campuses and its headquarters were raided in February for records involving student attendance, grades and graduate job placement. Such data helps determine ITT's qualification for federal education aid. About 68 percent of the company's $523 million in revenue last year came from federal programs, and most ITT students receive tuition aid.
ITT said it is not paying any fines or penalties in connection with the government's action.
"Although it was a very exhaustive and expensive effort, the company had nothing to hide, and we will continue to cooperate as the government looks at local issues at certain schools," said ITT Chairman and CEO Rene R. Champagne in a statement.
The company is also the target of an investigation by the Securities and Exchange Commission and the target of a shareholder lawsuit. However, a spokeswoman for ITT had previously said the SEC apparently was observing the Justice probe rather than assigning its own investigators to work separately.
ITT spokeswoman Rhonda Barnat declined to comment on the investigation.
Shares of ITT lost a third of their value on the day of the raids at campuses in Indiana, Texas, Virginia, Florida, Louisiana, Nevada, California and Oregon.
Shares closed Friday down 29 cents at $45.90 on the New York Stock Exchange. The stock has traded in a 52-week range of $27.98 to $61.26.
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