SEC Drops Corinthian Colleges Probe

The inquiry disclosed on Sept. 20 concerned projections and financial performance.
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Corinthian Colleges

(COCO)

surged Monday after saying the

Securities and Exchange Commission

ended an informal probe of the company without recommending enforcement action.

Corinthian, one of several heavily shorted secondary-education companies whose financial statements and enrollment practices have come under the scrutiny of regulators, disclosed the SEC probe on Sept. 20. The stock closed that day at $13.60 and was recently trading in Monday's premarket session at $19.70, up $2.58, or 15%, from Friday's close.

On Sept. 20, the company characterized the SEC probe as concerning its "projections, financial performance and communications with securities analysts and investors during the fiscal year ended June 30, 2004, including interim periods, and for the quarter ending Sept. 30, 2004, as well as the U.S. Department of Education program review at the San Jose, Calif., campus of Bryman College."

Two days later, Corinthian announced that the Department of Education had returned the same Bryman campus to its normal regulatory status after the company was able to "demonstrate that it can comply with the rules and regulations of the federal Title IV programs."