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
Great job as usual, David.
Aw shucks ma’am, it was nothing.
David
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
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
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.
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.