03/17/11 Insider Trading?
Last summer the Department of Education proposed controversial new regulations that applied only to for-profit colleges and exempted state universities and private colleges.
The new regulations worried investors causing stock prices of for-profit schools to plummet.
We have obtained emails from the Dept of Ed that raise serious questions regarding the relationship between senior officials and stock investors.
Steve Eisman is a major Obama campaign donor and hedge fund short-seller. He profits when a stock drops in price. The more it drops, the more he earns. Eisman sent an email to a senior Education official warning that career college “stocks are [rising]” adding “I know you cannot respond.” The email was forwarded to the confidential assistant to Education Secretary Arne Duncan.
The following day, a senior agency official made plans to make non-public information available to select individuals regarding new regulations ahead of the general public.
Those slated to receive this non-public information included Eisman and a business associate. Documents suggest these people were notified two days before the new rules were publicly released on July 23rd.
Many for-profit colleges saw their company stocks lose 35 to 50% of their value after the new rules were announced.
Anyone with advance knowledge of the proposed rules could have made a killing in the stock market.
It is time for the Securities and Exchange Commission and U.S. Attorney General to investigate.