Corinthian Colleges Tells Investors It Is Facing a Criminal Probe

Career College Central Summary:

  • After months of financial uncertainty and battles with regulators, Corinthian Colleges Inc. told investors Wednesday about the prospect of a criminal investigation by federal prosecutors.
  • The beleaguered Orange County for-profit college company said in a filing that it received a grand jury subpoena from the U.S. attorney's office in Los Angeles. The subpoena requests a broad range of documents and records related to the company's job placement rates, graduation rates and marketing materials used to recruit students.
  • The Santa Ana firm has previously received subpoenas and similar document requests from state attorneys general, the Securities and Exchange Commission and the federal Consumer Financial Protection Bureau, but Wednesday's announcement was the first to signal the possibility of a federal criminal inquiry.
  • The subpoena, issued Friday, is the latest in a string of headaches for Corinthian, which announced last month that it would sell 85 of its 107 campuses and online programs amid heightened scrutiny from the U.S. Department of Education.
  • A company spokesman, Kent Jenkins, said in a statement that Corinthian would cooperate with the request, but added that the company is prepared to "vigorously defend its policies, practices and track record of serving students effectively."

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