Garrett Harris 6 p.m., Aug. 27
Lawsuit Details Massive Insider Selling at Bridgepoint
A lawsuit newly filed in federal court by the law firm of Robbins Geller Rudman & Dowd spells out the massive dumping of shares by Bridgepoint top management. The suit represents those who acquired Bridgepoint stock between May 3, 2011 and July 6, 2012. The suit charges that management made materially false and misleading statements during that period in press releases, securities analyst conference calls and filings with the Securities and Exchange Commission about the accreditation problems that the company has with Ashford University, which accounts for most of its business. When the Western Association of Schools and Colleges denied Ashford accreditation a week ago (sending the stock down 34%), the accrediting body noted that it had warned Ashford of its concerns in mid-2011. (Another accrediting body warned of its concerns on Friday and the stock ended the week down more than 50%.)
The suit says, "By spring of 2011 the company had been warned that Ashford's future accreditation was at risk." But Bridgepoint did not report that to shareholders and analysts, according to the suit, citing specific statements by the company.
During the period in question, co-founder and Chief Executive Officer Andrew Clark dumped almost $18.2 million worth of stock, says the suit. Chief Financial Officer Daniel Devine sold $6.7 million worth and Chief Academic Officer Jane McAuliffe dumped $6.2 million. All told, key officers jettisoned 1.36 million of shares worth more than $31 million during that brief period.
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