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Monday, 31st January 2011

Profit-Seeking Colleges Claim Education Officials May Have Tipped Short-Sellers

Profit-Seeking Colleges Claim Education Officials May Have Tipped Short-Sellers

Profit-seeking chain colleges are pulling out all the stops in their fight against government regulation. A trade group filed a FOIA complaint demanding documents that it claims may show whether Department of Education officials leaked contents of the Department's response to a scorching GAO report to investors, who then short-sold stock in profit-seeking colleges.

It's the second federal complaint the Coalition for Educational Success has filed against the Department of Education.

In November, the Coalition claimed the Cabinet department's new rules were adopted illegally and are unconstitutionally broad. Now the Coalition claims the Department of Education ignored its FOIA request for records that may show collusion between federal education officials and short sellers.

The Coalition demanded Department of Education records of "communications between Ann Manheimer, Director of Workforce Development at ED [the Education Department], and various individuals and institutions."

The complaint states: "Some of these individuals and institutions are part of the not-for-profit sector. Others of these individuals and institutions are investors who may have 'shorted' stocks of for-profit colleges, meaning they stand to benefit financially if the public shares of for-profit career college companies decline in value."

Source:  Courthouse News Service


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