ITT Educational Services (ESI) Says ACICS Acts to Continue Show-Cause Directive for Review
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ITT Educational Services (NYSE: ESI) disclosed the following on Thursday morning
Item 7.01. - Regulation FD Disclosure.
As previously reported, on April 20, 2016, ITT Educational Services, Inc. (the “Company”) received a letter from the Accrediting Council for Independent Colleges and Schools (“ACICS”) informing the Company that the nature of certain adverse information since 2014 regarding certain financial and regulatory matters confronting the Company and its ITT Technical Institutes (the “Institutions”), including the Company being placed on Heightened Cash Monitoring I, investigations by certain state Attorneys General, pending litigation with the Consumer Financial Protection Bureau and the Securities and Exchange Commission, and the Company’s responses to ACICS requests for information, including those involving unsubstantiated allegations, call into question the Institutions’ administrative capacity, organizational integrity, financial viability and ability to serve students in a manner that complies with ACICS standards. The ACICS directed the Institutions to show cause at the next ACICS meeting why its current grants of accreditation should not be withdrawn by suspension or otherwise conditioned. The ITT Technical Institutes were required to submit, and did submit, to ACICS specified information responding to these concerns before June 15, 2016, submitted a supplemental response to ACICS on July 16, 2016, and presented its response to ACICS during their August 4, 2016 meeting.
On August 17, 2016, the Company received a letter from ACICS informing the Company that ACICS had acted to continue the show-cause directive for review at the next ACICS meeting in December 2016, for which the Company must provide evidence why its current grants of accreditation should not be withdrawn by suspension or otherwise conditioned. The Company must submit by November 1, 2016, specified information, including additional clarification, regarding various matters, including its policies on placement classification, changes to instructional resources, updates to certain campus retention rates, and updates to various licensing, litigation and regulatory matters.
To date, the Company has provided many regulatory bodies, including ACICS, with hundreds of thousands of records to review and the Company will willingly comply with ACICS’s continued requests for additional information. The Company strongly believes that the facts it provides in response to ACICS’s requests will continue to demonstrate the Company’s and Institutions’ compliance with regulatory and accreditation criteria. The Company is confident that it has and will continue to meet the ACICS accreditation standards.
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