SEC Alleges Fraud By ITT Educational Services, Two Top Executives

The Securities and Exchange Commission on Tuesday filed fraud charges against ITT Educational Services , its chief executive Kevin Modany and its chief financial officer Daniel Fitzpatrick. The SEC alleges that the national operator of for-profit colleges and the two executives fraudulently concealed from ITT's investors the poor performance and looming financial impact of two student loan programs that ITT financially guaranteed. ITT's stock price dropped sharply in 2014 as the company started to disclose the consequences of guarantee obligations on loan pools, the SEC said. "Our complaint alleges that ITT's senior-most executives made numerous material misstatements and omissions in its disclosures to cover up the subpar performance of student loans programs that ITT created and guaranteed," said Andrew J. Ceresney, director of the SEC's Division of Enforcement, in a statement.