NLPC Calls for SEC Probe of Education Short-Selling Scheme

Shireman photoToday, I asked the Securities and Exchange Commission (SEC) to investigate the activities of short sellers, including Steven Eisman, who profited from the collapse of share prices of companies that are in the for-profit education field. Evidence continues to emerge that officials of the Education Department cooperated in the shorts’ campaign. The same request was previously made by Citizens for Responsibility and Ethics in Washington (CREW), and other ethics advocates. My letter reads, in part:

Already, voluminous documents obtained through the Freedom of Information Act, related litigation and public records have demonstrated beyond debate the existence of a coordinated effort by short sellers to manipulate the stock prices of for-profit firms. These extensive activities have sought to influence government policy in such a way as to depress the share prices of shorted stocks.

A major feature of the short-seller effort has been to promote Department of Education policies that would …

Harkin-Orchestrated GAO Study on For-Profit Colleges Was Hatchet Job

Sen. Tom HarkinThe Government Accountability Office (GAO) is supposed to be an objective finder of fact for the U.S. Congress. Last year it weighed in on the controversy over aid to students attending for-profit colleges with a critical study which appeared to cast aspersions on the practices of some 15 for-profit colleges. The study was ballyhooed by the Obama Department of Education that supported a double standard of regulations: one for taxpayer-supported community colleges and a much tougher one for the for-profit schools.

Even more ominously, Wall Street hedge fund operators who were seeking to profit from a collapse of share prices for companies running for-profit schools also hailed the GAO report.

The GAO report was presented at a Senate hearing in August 2010 set up by Sen. Tom Harkin (D-IA), in photo, who had drawn criticism by having short-seller Steven Eisman testify as to why the government should discriminate in funding …