Overview
On March 8, 2016, Judge J. Paul Oetken of the United States District Court for the Southern District of New York granted final approval to an approximately $16.96 million cash settlement achieved by Lead Plaintiffs Plumbers and Pipefitters National Pension Fund and Metropolitan Water Reclamation District Retirement Fund with defendants ITT Educational Services, Inc., and two of its officers, Daniel M. Fitzpatrick and Kevin M. Modany.
Judge Oetken’s ruling resolves securities fraud claims against the defendants for alleged material misrepresentations and omissions concerning the company’s liabilities under certain risk-sharing agreements it had entered into with third-party lenders in connection with student loans issued to ITT students.
Of Judge Oetken’s approval, Carol V. Gilden, the lead attorney for the Lead Plaintiffs and the class, said, “this was hard-fought litigation, with defendants mounting a vigorous defense at every twist and turn. I am pleased that we were able to achieve an outstanding result for the Class after substantial discovery was taken in the case and resolve their claims.”
Case Background
Cohen Milstein served as lead counsel in the consolidated class action, representing lead plaintiffs, the Plumbers and Pipefitters National Pension Fund and Metropolitan Water Reclamation District Retirement Fund, and the proposed class of purchasers of ITT common stock (NYSE: ESI) during the Class Period, April 24, 2008 to February 25, 2103. The second consolidated class action complaint, filed in January 2014, asserts claims under Section 10(b) and 20(a) of the Securities and Exchange Act of 1934 against ITT, the Company’s Chief Executive Officer, Kevin Modany, and the Company’s Chief Financial Officer, Daniel Fitzpatrick.
In July 2014, the United States District Court for the Southern District of New York, upheld allegations of securities fraud against ITT Educational Services, Inc. (“ITT”), a for-profit educational institution with campuses throughout the country, for issuing false and misleading statements regarding the company’s liabilities and exposure under guarantees entered into with third party lenders in order to obtain private student loan funding for ITT’s students.