ITT Educational Services' Stock Surges Following 8-K Release

Shares of ITT Educational Services, Inc. ESI, a small-cap provider of postsecondary degree programs, surged higher by more than 16 percent on Thursday. ITT Educational Services reported in an 8-K filing that it received a Civil Investigative Demand from the U.S. Department of Justice which the company believes is "principally related to the Company's compliance with the U.S. Department of Education's compensation regulations and likely related to a sealed qui tam action." The company noted: "The qui tam False Claims Act complaint alleges, among other things, that the defendants violated the False Claims Act by receiving Title IV federal financial aid in violation of various Title IV rules and regulations, and also asserts a claim of retaliation." On January 15, 2016, the U.S. District Court for the Middle District of Florida issued an order unsealing the underlying qui tam case, revealing that the Department of Justice has declined to intervene in the qui tam action. "Accordingly, the DOJ has closed its investigation of the Company," ITT Educational Services further disclosed in its filing.