Career Education Corporation and the terrible, horrible, no good, very bad day

Last week, Career Education Corporation’s stock took a breathtaking fall. It started with the resignation of Gary McCullough, the CEO. That happened so quickly, he did not even have time to offer the usual walk-the-plank rap that he was leaving to spend more time with his family.

The next day, November 2, the company provided earnings information to investors in their earnings call. The earnings call reportedly included revelations that about an internal  investigation by outside counsel.

It seems that independent counsel reviewed the calculation of placement rates at some of CEC’s schools. CEC revealed that placement rates at some of its schools were improperly calculated. That is when CEC’s stock took its breathtaking fall.

The upshot is that Career Education Corporation is facing serious problems. Or, in the words of a favorite kid’s book, CEC had a terrible, horrible, no good, very bad day. Against this backdrop, we continue to pursue our consumer fraud class action against Career Education Corp. and the Western Culinary Institute/Le Cordon Bleu Portland for former culinary students at the Portland campus. The calculation of placement rates is one of the major issues in our case.

I’ll be interested to see what else comes out from these investigations. Regardless of what else comes out, we’re getting ready to complete depositions and get ready for trial.

Update: NPR did a story two days ago. Access it here

Updated: 9 Nov 2011

10 thoughts on “Career Education Corporation and the terrible, horrible, no good, very bad day

  1. Ms. Stoker-
    I understand that you and Mr. Sugerman go back a ways. Frankly, I find it hard to believe that he has friends, but, well, to each her own, I guess. I make this modest request for all of us who must put up with him. You do realize that any favorable comments–even from old friends–swell his head? He becomes almost insufferable. So if you’re going to say anything at all, please add something critical. Please.

    I remain ever your humble servant,
    The Editor

  2. Hi David,

    Yes, let’s get those thugs!

    I am a victim of CEC’s devious & fraudulent practices as well. I am wondering if there is anyway I can take action against them? Wish I were in Portland but sadly I live in Los Angeles.

    Cheers,

    Bobby

  3. I worked for a CEC school for a year following college. I needed the health insurance. My experience in for-profit education is one of the reasons I chose to pursue a career in non-profit law. I’ll probably never be rich, but I sleep much better at night. Many other former employees feel the same way. Best of luck with your suit.

  4. Hello-I just became informed about this class action lawsuit and am a former employee of CEC Aiuonline and a graduate of a masters degree in which I have had no help getting placement for the school and no employers want to hire me unless I have 5-10 years experience. I have been out of work for over a year and half after having been wrongfully fired. I have gone to mediation over this but wanted to go to trial…was talked out of it so its a done deal now. I also had stock in the company but no more. I worked from 2006-2010.

  5. If no one that worked for CEC is willing to testify that they knew about the decepetive recruitment practices, is it really going to help to sue them? I went to a CEC school, now have a $350,000 (yes, that says 350) private loan debt for the loans they led me to believe had federal loan protections. I was involved in a class action where, of course, CEC refused to admit any wrong doing and I got a measly $7,000.00 for a life of ruined credit and no hope of any way out…

    Former CEC empolyees need to man up and do the right thing if it actually weights on their conscience.

  6. TAS-Thanks for your comment. We are all ears and interested in hearing from and talking to former CEC employees. I imagine there are a lot out there and more and more everyday. These cases are tough, but we remain committed.

    David

  7. I suggest you talk to a lawyer in San Antonio who specializes in handling consumer fraud cases.

    David

  8. CTU online is a fraud? The education provided for the same price of higher institution of education is completely below college level. “more like a 10th grade level education”! With there predatory lending scheme, and sales tactics? They lure in there prey, with just about any information regarding a better future and a better job? The only real concern, is that CTU online likes to use innocent people’s credit and FAFSA funding to borrow from multiple lenders, a dollar here and a dollar there to accumulate projected amount need from each student to pay stiff salary expenses to fake and fraudulent instructors and teachers? Once the lenders and CTU online reach a limit of how much they could ciphen from financial institutions is when they stop and bump you out of school! Knowingly that wouldn’t be able to pay that money back, without a degree and job….Now your stuck with a debt, and no education, and the courses you took are even transferable to a local junior college? I already took my print of classes to a advisor at a local junior college and they couldn’t get none of the courses transfered over, because the courses are below standards. I have been in debt since 2006 and yet i am paying for something i dont have, can’t use, or get back into CTU online to finish school and graduate? FRAUD FRAUD FRAUD………..They are not ripping innocent people off, they are robbing everyone blind? Anyone that has a the same problem with CTU online – reply at buying1 @ mail.com and let’s get together and fight what’s right and get these clowns…..They know exactly what they are doing, so did carrington college? CLASS ACT LAWSUIT

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