The U.S. Securities and Exchange Commission on Tuesday announced fraud charges accusing ITT Educational Services Inc and two top executives of fraudulently concealing the poor performance of two student loan programs that the for-profit college operator financially guaranteed.
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The regulator alleged that ITT, Chief Executive Kevin Modany and Chief Financial Officer Daniel Fitzpatrick engaged in a fraudulent scheme and made a number of false and misleadingstatements to hide the scope of the company's guarantee obligations.
In morning trading, ITT shares were down 29 cents, or 7.2 percent, at $3.73.
(Reporting by Jonathan Stempel in New York)