ITT Educational Services Inc. will pay $16.9 million in a securities settlement preliminarily approved Monday by a New York federal judge, after investors had accused the company of hiding or downplaying the extent to which increasing student-loan defaults were affecting its bottom line.
Lead plaintiffs Plumbers and Pipefitters National Pension Fund and Metropolitan Water Reclamation District Retirement Fund said in their January 2014 second amended complaint that ITT had swept under the rug its exposure to growing student-loan defaults and of “assuring investors throughout the class period that the company’s liabilities were not material.”
U.S. District Judge J. Paul Oetken preliminarily approved the settlement Monday.
“We think the proposed settlement is an excellent result on behalf of the class and, if approved, will fully resolve their claims," Carol Gilden, an attorney for the plaintiffs, told Law360.
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