The Oregon Biz Report - Business News from Oregon

Read about accutane journal moderate acne here

Oregon wins $10 Million lawsuit against University of Phoenix

October 19, 2010

Oregon sues to recover $10 million connected to misleading filings by University of Phoenix
– Oregon students and investors suffered because of the company’s alleged practices
By Oregon State Treasurer,

SALEM – Oregon Treasurer Ted Wheeler and Attorney General John Kroger today announced a securities fraud lawsuit against Apollo Group Inc. of Arizona, the parent company of University of Phoenix, and several executives, for misleading investors in the company’s financial statements.

The for-profit college allegedly deceived investors about its revenue between 2007 and 2010, a practice that sparked an investigation by the U.S. Securities and Exchange Commission. The loss to the Oregon Public Employee Retirement Fund as a result of the misrepresentation is estimated at roughly $10 million.

The company’s financial practices also hurt Oregonians who were pursuing higher education. The company allegedly did not follow proper steps when dealing with federal student loans, and improperly canceled loans and left students on the hook financially for classes they did not take.

“With this lawsuit, we are taking a clear stand that we will not tolerate businesses practices like those used by the University of Phoenix to take advantage of their students and their investors,” said Treasurer Wheeler, who sits on the Oregon Investment Council. “As a responsible investor, the Oregon Treasury takes action against companies that violate the public trust and fail to act in shareholders’ best interests.”

“Companies that cook their books will have to answer to Oregon in court,” said Attorney General Kroger.

Apollo Group allegedly misrepresented its income by failing to account for losses that were the result of student withdrawals from classes. The practice was disclosed in an October 2009 filing, at which time Apollo disclosed the SEC investigation.
In reaction to the disclosure, shares of Apollo plummeted, losing 17.7 percent in value in a single day, on Oct. 28, 2009. The pre-disclosure price dropped from $72.97 per share to $60.06 per share, wiping out nearly $2 billion in market capitalization. The Company’s stock price continued to trade lower over the next several months and remained deflated with an average closing price of $58 per share in the 90 days subsequent to the disclosures.

In 2010, Apollo’s stock price continued to crumble in reaction to, among other things, political calls for more oversight of the for-profit college industry, and Congressional hearings that exposed certain of Apollo’s unsavory and improper business practices.  By Aug. 2, 2010, Apollo’s stock was trading in the $46 range, but it was again rocked when it was revealed during a Senate investigation and in a report submitted and presented to Senate investigators by the Government Accountability Office that Apollo was committing widespread fraud in marketing its services to prospective students.  By Aug. 13, 2010, shares of Apollo were trading at $38.94.

In the lawsuit, filed in U.S. District Court in Arizona, Oregon is joining a class action suit and seeking lead plaintiff status.

The suit accuses Apollo Group Inc. and its executives of violating securities law by making statements to investors that were materially false and misleading because they misrepresented and/or failed to disclose information crucial to investors’ ability to accurately assess the risks of their investments.

The Oregon Public Employees Retirement Fund, which had a value of $51 billion as of Aug. 31, is diversified and invested around the world. Oregon invests in several passive strategies, including variants of the S&P and Russell index series.  Apollo Group, Inc. (APOL) is a part of those indices and, therefore, is a holding.

Apollo Group is one of the largest private education providers in the nation and has been in the education business for more than 35 years. There are four locations of University of Phoenix in Oregon.

The company derives a majority of its revenue from federal student loans, and is the largest single recipient of student loan funds in the United States. Institutions receiving loans are required to follow federal regulations, including limits on the percentage of defaulted loans extended to students. Institutions that violate these requirements risk losing their federal loan accreditation.

  
Print This Post Print This Post    Email This Post Email This Post

Discuss this article

Falak Elhuzayel October 22, 2010

This is good news about oregon winning 10 million dollar lawsuit aganist university of phoenix.I am in the same situation with the university of phoenix, and just joined the class lawsuit in california. I attended university of phoenix for over a year and a half and have 51 credits with them. the instructor never answered my messages or my emails and did not accept my homework and started giving me failing grades so I withdrew from the class. I was qualified for a grant from the goverment that I never had to pay back. Now Iam in collection with university of phoenix, because they claim I defaluted on my loan when i never applied for any loan. Itried to tranfer to another university but university of phoenix are not releasing my transcript bacause they claim Iowe them money. now I am not able to continue my education. What a mess!

FalakElhuzayel October 22, 2010

sorry I forget my email.
my phoen is 7142347447.

Barron November 1, 2010

Hello, been throught it to with Pheonix, I have attended for 4 months and started to realize that they were just in it to get the student loan money. They are claiming Iam in default yet there credits are not excepted by another schools but them. They are taking large amounts of student’s loan money and giving sub education to please the government. Please tell me how to join the lawsuit.

dee November 12, 2010

I was a former student there, a month before I was set to finish my entire course, I was told that all of my lower division classes were not accepted. I would need to complete 2.67 credits in humanity and 2.67 in social science. I was able to clep the humanity class. I took the social science clep exam but did not pass. I do better at in class learning and test taking for some reason. I told my couselor that I would return to take teh social sceience class when I save up some moeny, as I had to start paying off my student loan, since I was done with my degree. I walked at commencement ceromony. I checked back with the school to make sure I only had the one class to finsih before I get my degree mailed to me. I was told yes 2.67 credits in social science. Which by the way is ridiculous since it is not even a full class. Anyway time went by I got married had a baby. I was finally personally and financially ready to finish up and get my degree mailed to me. I spoke to a counclor and was told that I need to basically re-start the whole program since the academic criteria changed. I would need to finish 14 more units. I appealed with the board and said I FINISHED MY FULL COURSE. I ONLY HAD 2.67 IN LOWER DIVISION. The appeal was upheld and I will not get my degree that I worked hard to achive. I am looking into getting some legal help. I am out thousands of dollars, years of my time and nothing to show of it.

FALAK November 13, 2010

As students from that HORRABLE University of phoenix, we should not feel we are the victims of that university, BUT we need to fight for our rights till the end of that institution.

Ginger Swindell December 16, 2010

I would like to know how to go about getting involved. I have been a student at UOP for nearly a year and only received 1 payment from them. They will not give any answers, will not return phone calls, and will not return emails. They shut down when I ask questions about my financial aide and grant money. Can anyone help me?

Biaca Black February 23, 2011

Hi myself is having a problem with Unversity of Phoenix. I have a balance for $2,445.00. However, Bank of America were one of my lender who approve me for loan for 2,445.00. But I fail one of my subject so that’s what owe, so I receive my loan from Bank of America instead of University of Phoenix applying the loan to my debt University of Phoenix resent my loan back the bank. So now I can’t return back to University of Phoenix to finish my last year to get my degree year 2011. I just receive a collection letter from ACT 01/31/11. Said they the collection dept will place judgement against me if I don’t pay.my phone number is 602.881.8636. I would like to be part of the Lawsuit has well. I’m from Phoenix Az. Where the college at what do I do, to be part of the Lawsuit? Please contact me. Thnx

Leave a Reply

Your email address will not be published. Required fields are marked *


+ one = 9

Recent Articles

Press Releases



Top Business News

 

Top Women's News

 

Top Natural Resource News

 

Top Faith News

 

Copyright © 2014, OregonReport. All Rights Reserved. | Terms of Use - Copyright - Legal Policy | Contact Oregon Report

Stay Tuned...

Stay up to date with the latest political news and commentary from Oregon Business Report through daily email updates:

Delivered by FeedBurner

Prefer another subscription option? Subscribe to our RSS Feed, become a fan on Facebook, or follow us on Twitter.

RSS Twitter Facebook

No Thanks (close this box)