On March 8, 2016, Judge J. Paul Oetken of the United States District Court for the Southern District of New York granted final approval to an approximately $17 million cash settlement achieved by Co-Lead Plaintiffs with defendants ITT Educational Services, Inc. (“ITT”), and two of its officers. The settlement benefits a class of purchasers of ITT common stock between April 24, 2008 and Feb. 25, 2013.
Cohen Milstein served as lead counsel in the consolidated class action.
The second consolidated class action complaint, filed in January 2014, asserts securities fraud claims under Section 10(b) and 20(a) of the Securities and Exchange Act of 1934 against ITT, the Company’s Chief Executive Officer and the Company’s Chief Financial Officer for alleged material misrepresentations and omissions concerning the company's liabilities under certain risk-sharing agreements it had entered into with third-party lenders in connection with student loans issued to ITT students.
In July 2014, the United States District Court for the Southern District of New York, upheld allegations of securities fraud against ITT, a for-profit educational institution with campuses throughout the country, for issuing false and misleading statements regarding the company’s liabilities and exposure under guarantees entered into with third party lenders in order to obtain private student loan funding for ITT’s students. The case was hotly contested and involved unraveling complex accounting treatments governing ITT’s transactions with the third party lenders, set against the Department of Education and Higher Education Act default guidelines. The case settled during discovery after reviewing and analyzing over two million pages of documents, after depositions had been taken and in the middle of class certification briefing.
In re: ITT Educational Services, Inc. Securities Litigation, Case No. 1:13-cv-01620, U.S. District Court for the Southern District of New York