NEW YORK (TheStreet) -- DeVry Education Group (DV) stock is retreating 15.29% to $20.11 on heavy trading volume on Wednesday afternoon after the education provider was sued by the Federal Trade Commission for allegedly making deceptive claims in its advertising.
The company claims that 90% of graduates actively seeking employment started a new job in their field within six months after graduating and that former students had 15% higher incomes than average graduates a year after graduation.
The FTC alleges the claims are deceptive because numerous graduates were not working in their field and many graduates were excluded by being categorized as inactive in their job search.
"DeVry Group believes that the FTC's complaint... is without a valid legal basis," the company said in a statement.
DeVry has been cooperating with the FTC during the regulator's two-year investigation, but the parties were unable to settle, the company added.
Additionally, the Department of Education issued a notice to DeVry that will require the company to stop using some advertising and have an independent audit before publishing student data in marketing campaigns.
So far today, 4.65 million shares of DeVry have exchanged hands, compared with its average daily volume of 629,905 million shares.
Separately, DeVry has a "hold" rating and a letter grade of C at TheStreet Ratings because of the company's largely solid financial position, reasonable valuation levels, expanding profit margins, disappointing return on equity, weak operating cash flow and disappointing stock performance.
You can view the full analysis from the report here: DV
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.