Bridgepoint Education receives subpoena and CID from DOJ regarding misstated Title IV refund revenue or overstated revenue
Civil investigative Demand from DOJ
On July 7, 2016, Bridgepoint Education, Inc. (the “Company”) received from the Department of Justice (the “DOJ”) a Civil Investigative Demand (the “CID”) related to the DOJ’s investigation concerning allegations that the Company may have misstated Title IV refund revenue or overstated revenue associated with private secondary loan programs and thereby misrepresented its compliance with the 90/10 rule of the Higher Education Act of 1965, as amended. Pursuant to the CID, the DOJ has requested from the Company documents and information for fiscal years 2011-2014. The Company is evaluating the CID and intends to fully cooperate with the DOJ on this matter.
On July 7, 2016, Ashford University was notified by the U.S. Department of Education (the “Department”) that an off-site Program Review has been scheduled to begin on July 25, 2016 to assess Ashford’s administration of the Title IV programs in which it participates. The Program Review initially will cover students identified in the 2009-2012 calendar year data already provided by Ashford to the Department, but may be expanded if appropriate. Source
May 2016 Subpoena
- On May 18, 2016, the Company received a second subpoena from the SEC seeking additional information from the Company, including information with respect to the $13.9 million accrual disclosed by the Company in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 with respect to the potential joint resolution of investigations by the Attorney General of the State of California and the Consumer Financial Protection Bureau (the “CA AG/CFPB Investigations”), the Company’s scholarship and institutional loan programs and any other extensions of credit made by the Company to students, and student enrollment and retention at the Company’s academic institutions.
- Pursuant to the May 2016 Subpoena, the SEC has requested from the Company documents and detailed information for, in the case of the CA AG/CFPB Investigations, the periods at issue in such investigations, in the case of the Company’s scholarship and institutional loan programs and related matters, the period from January 1, 2011 to the present, and for all other matters, the period from January 1, 2014 to the present. The Company is evaluating the May 2016 Subpoena and intends to fully cooperate with the SEC on this matter. Source
July 2014 Subpoena
Bridgepoint Education, Inc. (the “Company”) previously disclosed that it received from the SEC a subpoena, dated July 22, 2014, seeking information with respect to certain of the Company’s accounting practices, including revenue recognition, receivables and other matters relating to the Company’s restatement of its financial statements for the fiscal year ended December 31, 2013 and revision of its financial statements for the fiscal years ended December 31, 2011 and 2012. The July 2014 Subpoena requested documents and detailed information for the time period January 1, 2009 to present. The Company has been cooperating with the SEC on this matter.