Updated from 9:18 a.m. EST
was under moderate pressure Tuesday after word emerged the company has been sued by a student at its Florida Metropolitan University unit.
The shares were recently trading at $60.64, down $1.41, or 2.3% but above their low for the day. According to a company filing, the student's complaint stems from her inability to transfer credits from the university's associate's degree to another college's bachelor's program.
The company said in its filing that the plaintiff signed documents acknowledging that accreditation by the Accrediting Council for Independent Colleges and Schools doesn't guarantee credits will be transferable.
"This fact is disclosed to every student in the catalogue received upon enrollment," the company wrote. "Additionally, every student is informed upon enrollment that transfers of credit are always at the discretion of the receiving institution, and that FMU cannot, therefore, make any predictions or guarantees about whether credits will be transferable to another institution."
The suit reportedly seeks damages of more than $15,000. Corinthian said its students agree to resolve legal claims via arbitration, and said it would seek to compel that forum for the current claim.
Brokerage Bear Stearns said the suit was a sideshow.
"This will undoubtedly provide fodder for the critics who have been raising issues about quality, and given heightened investor concern over regulatory and quality issues within the group, COCO shares could be marginally weak on the news," Bear wrote in a Tuesday morning research note. "The financial risk, however, is minimal in our views."
Corinthian's ability to weather the initial shock of the charge is good news to the private education sector. Several companies have seen several major routs over the last few months on reports of legal entanglements -- routs that have spread into shares of their peers.
saw its shares tank from over $60 to a Monday close of $37.71, after the company was searched and subpoenaed by the Justice Department last week.