Education Business Torts

Read need-to-know updates, commentary, and analysis on Education issues written by leading professionals.
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SEC Sues For-profit College Over Alleged Loan Fraud

A major for-profit education corporation is facing a lawsuit from the U.S. Securities and Exchange Commission (SEC) because of allegedly fraudulent activity by the company’s chief executive officer and chief financial...more

“Abusive” Development – Recent Applications of the Prohibition against Abusive Acts and Practices

The enactment of the Dodd-Frank Act in 2010 created the Consumer Financial Protection Bureau (“CFPB”) and, among other things, vested it with broad authority to enforce prohibitions on unfair, deceptive and abusive acts and...more

SEC Files Fraud Action Centered on Student Loans

Student loans, and the debt burdening many students at graduation, is an important political topic. It is not generally a subject for the Securities and Exchange Commission. Nevertheless, at the center of is most recent...more

The UNC Former Student-Athletes’ Litigation: The Defense Enters the Field

We wrote last month about the lawsuit filed against the University of North Carolina and the NCAA by former UNC student-athletes Rashanda McCants and Devon Ramsey....more

The CFPB & UDAAP: A “Know It When You See It” Standard?

The Consumer Financial Protection Bureau’s (CFPB) continued and expanded reliance on its sweeping authority to prohibit unfair, deceptive, and abusive acts or practices (UDAAP) continues to command the attention of financial...more

Office Depot Agrees to Pay $68.5 Million to Settle California FCA Claims

A California judge approved a $68.5 million settlement yesterday to resolve allegations that Office Depot violated the California False Claims Act (CFCA) by overcharging California public entities for office and classroom...more

Student Debt Relief Services Slapped with TSR and UDAAP Claims

On December 11, 2014, the CFPB filed two actions against debt relief companies. Complaint for Permanent Injunction and Other Relief, Consumer Fin. Prot. Bureau v. IrvineWebWorks, Inc., No. 8:14-cv-1967 (C.D. Cal. Dec. 11,...more

Section 75-1.1 Stars in New Putative Class Action Against UNC

Last Thursday, former UNC football player Michael McAdoo filed a putative class action against UNC-Chapel Hill. This federal complaint has already received extensive publicity. The publicity, though, has overlooked the...more

Disciplinary Proceedings and the Duty of Care

In Coventry University v Mian [2014] EWCA Civ 1275, the Court of Appeal considered whether an employer had breached its duty of care by commencing disciplinary action against an employee on the basis of a preliminary, rather...more

Conflicts & Nepotism – A Dangerous Employment Cocktail

Last week, Alabama Governor Robert Bentley removed Alabama State University Trustee Marvin Wiggins for violating the University’s conflict of interest rules. The removal proved once again that if you are responsible for the...more

SEC Resolves First Case Under New Municipalities Continuing Disclosure Cooperation Initiative

On July 8, 2014, the SEC announced that it had settled charges that a school district in California misled bond investors about its failure to comply with its continuing disclosure obligations under Rule 15c2-12 of the...more

SEC Issues First MCDC Cease and Desist Order

Yesterday, the Securities and Exchange Commission (SEC) announced its first cease and desist order under its Municipalities Continuing Disclosure Cooperation Initiative (MCDC Initiative). The MCDC Initiative was introduced on...more

The CFPB & UDAAP: A “Know It When You See It” Standard?

Institutions regulated by the Consumer Financial Protection Bureau (CFPB) and subject to its enforcement authority are dealing with of the agency’s sweeping authority to prohibit unfair, deceptive, and abusive acts or...more

Alleged illegal recruiting for college leads to False Claims Act complaint

In Brief - Stevens-Henager College and its owners are accused of offering compensation incentives to admission consultants based on the number of students they recruit. - The government alleges that the college...more

SEC Charges Charter School Operator with Disclosure Violations, Suggests It May Charge Individuals

The U.S. Securities and Exchange Commission recently charged a Chicago charter school operator with defrauding investors in a $37.5 million bond offering by failing to disclose transactions that presented conflicts of...more

Illinois Attorney General Files UDAAP Action Against For-Profit College

The Illinois Attorney General, who filed suit two years ago under the Illinois Consumer Fraud and Deceptive Business Practices Act against a group of entities related to for-profit college financing, amended its complaint to...more

Illinois AG wins motion to add Dodd-Frank UDAAP claim to complaint against for-profit college

Earlier this month, an Illinois state court granted the motion of the state’s Attorney General to further amend her complaint in a lawsuit filed against a for-profit college and its owners to add new counts alleging that the...more

Congress Members Urge Department of Education to Amend Rules Governing Banking Practices on College Campuses

In a continued effort by federal and state legislators to curb alleged abuse by financial institutions on college campuses, several members of Congress sent a letter to the Department of Education expressing their support for...more

Illinois AG seeks leave to add Dodd-Frank UDAAP count to complaint against for-profit college

Lisa Madigan, Illinois Attorney General, recently filed a motion in a state court lawsuit against a for-profit college and its owners and operators seeking leave to further amend her complaint to add new counts alleging that...more

For-profit education company sued by CFPB seeks dismissal of complaint

ITT Educational Services, the defendant in the CFPB’s first enforcement action against a for-profit education company, has filed a motion seeking dismissal of the CFPB’s complaint. Filed this past February in an Indiana...more

Non-Courtside Madness? Resume Fraud Costs Manhattan Coach Steve Masiello From Securing South Florida Coaching Job

Our attention on the NCAA college basketball tournament was temporarily diverted by the non-courtside drama that played out this week when the University of South Florida revoked its head coaching offer to Steve Masiello...more

Illinois Supreme Court Upholds Dismissal Of School District’s Claim Against Its Architect

The Illinois Supreme Court recently issued a decision in Gillespie Community Unit School District No. 7 v. Wight & Company that upholds the dismissal of the District’s claim of fraudulent misrepresentation against its...more

Police Concern About Public Safety Sufficient To Justify Shutdown Of Speech At School

In a lawsuit arising out of a well-publicized incident in West Michigan, Agema v. City of Allegan involved a lawsuit by former Michigan State Representative David Agema and others against the City of Allegan and others...more

First Circuit Enforces D&O Policy’s Known Circumstances Exclusion

The First Circuit Court of Appeals recently held that a “Known Circumstances Exclusion” in an insured school’s D&O policy barred coverage for an underlying action involving misrepresentations in soliciting a donation....more

First Circuit Holds Prior Knowledge Exclusion Applicable

In its recent decision in Clark School for Creative Learning, Inc. v. Philadelphia Indemnity Ins. Co., 2013 U.S. App. LEXIS 21568 (1st Cir. Oct. 23, 2013), the United States Court of Appeals for the First Circuit, applying...more

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