SEC Fines CEO for Failure to Disclose

On Jul. 6, SEC fined managers of ITT Educational for disclosure.

  • SEC settlement vs. two former senior executives of ITT Educational Services Inc.
  • Follows SEC May 2015 settled charged against company for fraud.

Alleged Violations

  • Kevin Modany CEO and Daniel Fitzpatrick fined for concealing financial condition.
  • Charges against two executives, were based on same conduct as their company.
  • Firm had imminent problems re two student loan programs that ITT guaranteed.
  • Fraudulently concealed poor performance, looming financial impact of programs.
  • Modany and Fitzpatrick settled as control persons, for ITT’s fraud and violations.

Sanctions of Individuals

  • Barred both from serving as officers and directors of public companies for 5 years
  • Ordered Modany and Fitzpatrick to pay penalties of $200k and $100k respectively.
  • Resolution successfully concludes case, which was scheduled for trial Jul. 9, 2018.