Call it the school of hard knocks, Wall Street style.
Shares of the technical trade school group
ITT Educational Services
Wednesday were hammered after the company revealed that federal agents were executing a search warrant at its headquarters and other facilities.
After a two-hour halt in trading, shares were down $16.40, or 28.6%, to $41 in trading volume four-times their daily average.
The Indianapolis-based company says the search warrant and related subpoenas were connected to "information and documentation" regarding retention, graduation and attendance statistics, recruitment and admissions materials, student grades, and other records.
"We have not been informed of any specific allegations or charges at this time," the company said.
ITT Educational Services provides technology-oriented postsecondary degree programs at 74 schools in 28 states. For the fiscal year ended Dec. 31, the company had net income of $58.9 million on revenue of $522.9 million.
In recent months, the industry has been hurt by periodic reports and speculation questioning record keeping and other business practices.
Shares in industry rivals including
University of Phoenix Online
also fell on the news.