DeVry's Stock Set To Open Lower After Disclosure Of Investigation

DeVry Education Group's stock could be set for a weak opening Monday, after the for-profit education company disclosed in a regulatory filing after Friday's close that it was being investigated by the U.S. Attorney for Ohio's Northern District for allegations under the False Claims Act. The stock was still inactive in premarket trade, but traded down as much as 0.8% in after-hours trade on Friday. DeVry said the U.S. Attorney alleges it offered an associate degree program in health information technology without providing necessary information regarding requirements for obtaining a degree and a job in the field upon graduation. BMO Capital Markets analyst Jeffrey Silber said the most recent false-claims suit filed against DeVry was settled in March 2010 for $4.9 million. "We believe this disclosure will likely put pressure on [DeVry's] stock on Monday, and we expect management to address the issue when the company reports its earnings this Thursday after the close," Silber wrote in a note to clients. The stock has tumbled 24% year to date, while the S&P 500 has gained 1.1%.

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