Overview
In an order dated Friday, Judge Marrero dismissed a class action accusing the for-profit college company ESI, which operates over 100 ITT Technical Institutes, of defrauding investors by falsely attributing its success to (among other things) demand for its programs and placement of its graduates when, in fact, the company's business was driven by high-pressure recruiting and other "predatory" practices. Judge Marrero found the complaint lacked sufficient specificity, notwithstanding its length:
The Complaint includes 76 pages of block quotes of nearly every public statement made by ESI during the Class Period, with the statements alleged to be misleading in bold and italics. Interspersed throughout these block quotes are vague allegations purporting to explain how and why the bolded and italicized portions are misleading. However, Plaintiff's bolding and italicizing does little to satisfy the PSLRA's specificity requirement. This is because Plaintiff highlights more than half of the text in the giant block quotes, while simultaneously conceding that it is not challenging many of the statements it has chosen to highlight. Vague and disorganized allegations, no matter how voluminous, do not satisfy the PSLRA.
