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Apollo 'Disappointed' in Ruling

The education company responds to a federal court judgement.
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University of Phoenix owner

Apollo Group


has been slapped with a federal court judgment of roughly $280 million, or $5.55 a share, for withholding information on its student-recruitment policies, the

Associated Press

reported Wednesday.

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A jury in the U.S. District Court in Phoenix determined that, for several months in 2004, Apollo had misled investors by failing to publicize a Department of Education report stating that University of Phoenix enrollment counselors were paid based solely on their success at recruiting students, the



Phoenix-based Apollo, for its part, said in a press release that it's "disappointed" in the ruling, arguing that the plaintiff class "did not suffer any damages." The DoE report -- the contents of which Apollo described as "unsubstantiated allegations" -- had "caused no statistically significant movement in Apollo's stock price," the company said.

Apollo also said evidence showed that it had "acted responsibly" and "at all times communicated truthfully to the market." Added Apollo attorney Wayne Smith, "The law does not require the disclosure of preliminary or unproven charges in a government investigation."

"In not disclosing the report at issue," Smith posited, "Apollo acted in good faith and in the best interests of its students, alumni, employees and shareholders, who could have been unfairly harmed by a premature disclosure." The company said it's "evaluating options for appeal."

Apollo shares closed down $1.36, or 1.7%, at $78.57.