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Suit charges Bridgepoint cooked books

Company did admit that internal controls weak

A former executive charged in federal court February 9 that Bridgepoint Education, the troubled for-profit, mainly online college, fired him when he pointed out that the company falsified its financial reports by inaccurately projecting the student retention rate.

A senior vice president of student services and operations for Ashford University, the company's major operation, says he told the company early last year that the enrollment figures were erroneous and the financial report overly rosy. At a meeting, his boss said he had made a "career-limiting move" and was then fired. He then sued under the protection of whistleblowers afforded by the Sarbanes-Oxley Act.

The company earlier reported that its internal controls are weak. According to Bridgepoint's most recent quarterly report, the company is being investigated by the Securities and Exchange Commission, the Consumer Finance Protection Bureau, and the attorneys general of California, Iowa, Massachusetts, New York, and North Carolina.

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A former executive charged in federal court February 9 that Bridgepoint Education, the troubled for-profit, mainly online college, fired him when he pointed out that the company falsified its financial reports by inaccurately projecting the student retention rate.

A senior vice president of student services and operations for Ashford University, the company's major operation, says he told the company early last year that the enrollment figures were erroneous and the financial report overly rosy. At a meeting, his boss said he had made a "career-limiting move" and was then fired. He then sued under the protection of whistleblowers afforded by the Sarbanes-Oxley Act.

The company earlier reported that its internal controls are weak. According to Bridgepoint's most recent quarterly report, the company is being investigated by the Securities and Exchange Commission, the Consumer Finance Protection Bureau, and the attorneys general of California, Iowa, Massachusetts, New York, and North Carolina.

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Comments
19

With all the other fraudulent or misleading things done by this corporation, would it be any surprise that they also cooked the books?

Feb. 12, 2016

Visduh: Good point. Bridgepoint has been in trouble in almost every way possible. The methods used in its recruitment of students is widely questioned. This whistleblower suit challenges the company's accounting for such students, leading to an overstatement of revenue. Best, Don Bauder

Feb. 12, 2016

Are there any good on line for profit schools? I seems that all of these schools scam people by collecting money for worthless degrees that no one recognizes. What are the success ratios of these schools? Who hires these students with degrees from the We-got-all-your-money "universities"? Like insurance companies whose primary function is making profit not paying claims, these for-profit schools are all about making money not education.

Feb. 13, 2016

AlexClarke: There may be a handful of respectable schools that specialize in, say, auto repair or electronics. These are not four-year, degree-granting institutions. The ones offering four-year degrees are generally known for dubious or illegal recruiting techniques (going after injured, mentally-challenged veterans, for example), improper accounting, and the like. Best, Don Bauder

Feb. 13, 2016

Education and the profit motive are like electricity and water. They don't mix.

Feb. 13, 2016

hwstar: Absolutely. Education and corporate profits do not belong together. Best, Don Bauder

Feb. 13, 2016

Simon Moghadam: Yes, San Diego politicians love the company. It tosses money around for things like the Holiday Bowl. What is worse, the San Diego establishment loves this company. Best, Don Bauder

Feb. 13, 2016

Who coined the words "Scam Diego".

It certainly applies to Bridgepoint/Ashford.

Remember the PBS Frontline TV Documentary about Online College Scams that prominently featured San Diego Flim/Flam Artists and Schools?!

Feb. 13, 2016

SportsFan0000: I don't know that I originated the words "Scam Diego," but I did use them frequently during the widespread coverage of the Dominelli Ponzi scheme that surfaced in the early 1980s. I took some heat for doing so. I was with the U-T then. I honestly can't remember if I ever took credit for originating that word combination. Best, Don Bauder

Feb. 13, 2016

Well, in CA at least, they'll get a Brown-out.

Feb. 13, 2016

Flapper: I can't remember Governor Brown or one of his surrogates commenting on Bridgepoint. The company is under investigation of the California attorney general. Best, Don Bauder

Feb. 13, 2016

Call it speculation, but if any attorney-general knows what's good for her or him, they will drop the suit. If they convict, Brown will pardon.

Feb. 13, 2016

Flapper: In the case of Bridgepoint, I don't know that you can say Brown will intervene with an AG initiative. He is doing so, of course, with the CPUC. Best, Don Bauder

Feb. 13, 2016

Alex, when we have free higher education for all, the scam-U's will dry up.

Feb. 13, 2016

Flapper: Before we get free higher education, we have to elect the candidate who champions it, Bernie Sanders, and probably change the balance in the House and Senate, too. Best, Don Bauder

Feb. 13, 2016

As Sanders points out, HE ain't gonna get it done; WE will have to get to the polls in record numbers.

Exactly how?

Feb. 13, 2016

Flapper: "How?" is a good question. Best, Don Bauder

Feb. 13, 2016

Admitting that "internal controls are weak" is a way of deflecting attention away from the fraudulent, therefore criminal, activity. Standard, finger-pointing operations by pointing to nobody.

Feb. 13, 2016

Flapper: Under the law, companies must say whether their internal controls are strong enough to catch and deter fraud. The admission may deflect attention away from fraudulent activity, but it is something publicly-held companies have to do. Best, Don Bauder

Feb. 13, 2016

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