Shares in education company
fell quickly and furiously on rumors of a civil lawsuit against the company, two days after
reports that a competitor was hit by an employee complaint alleging improper activity.
The company said: "It knows of no events or activities that would warrant any concern in the company's performance." In a statement, it added that "the extraordinary nature of this morning's trading and the subsequent trading halt warranted this assurance to shareholders."
At one point, Corinthian shares were down as much as 33% in trading, 10 times normal volume. The selloff was so swift and vicious that trading was halted and the
also cancelled all trades of Corinthian shares between 10:46 a.m. and 10:58 a.m. EST. Recently, shares were down $2.29, or 4%, to $55.23.
Corinthian shares had already fallen 17% this week, following news Wednesday that an employee at postsecondary education rival
filed a complaint alleging officials had forged signatures and tampered with student files in an effort to inflate enrollment and company profits.
The company denies any wrongdoing, but the employee complaint raised questions about what analysts described as a "pressure cooker" work environment at Career Education and an industry with a "culture of growth."
Career Education shares were up slightly Friday, after losing a combined 33% on Wednesday and Thursday.
The Corinthian selloff Friday spread to other companies in the sector;
Education Management Corp.
University of Phoenix Online
all fell on the news.
Santa Ana, Calif.-based Corinthian operates 83 colleges and education centers in 21 U.S. states and another 61 colleges and corporate training centers in Canada.