August 8, 2020

Education Department Rules on For-Profit Schools Created With Investor’s Help

Steve Eisman, senior portfolio manager of the FrontPoint Financial Services Fund, speaks at the 16th annual Sohn Investment Conference in New York May 25.

A proposed regulation from the Education Department threatens to devastate for-profit career or trade schools, but one thing is even more controversial than the regulation — how it was crafted.

Education Department officials were encouraged and advised about the content of the regulation by a man who stood to make millions if it were issued.

“Wall Street investors were manipulating the regulatory process and Department of Education officials were letting them,” charged Melanie Sloan of a liberal-leaning ethics watchdog called Citizens For Responsibility and Ethics in Washington.

Sloan has sued the Department of Education over the matter and called on the Securities and Exchange Commission to investigate. An inspector general is also investigating whether officials shared sensitive information with officers of a hedge fund that stood to gain from it.

“It is an entirely new thing to actually try and manipulate the regulation in order to change the stock price and make a lot of money,” she said.

But critics say that is no excuse to work with a hedge fund manager who stood to gain from the regulation whose content he was trying to guide.

Interesting how our current government is making headlines touting anti corruption and more regulations yet they work hand in hand with one of the most notorious manipulators in the business, we wonder how much he is giving to their campaign…

Read more @ fox: http://www.foxnews.com/politics/2011/05/31/education-department-rules-profit-schools-created-investors-help/#ixzz1Nwxp9Br4

 

Related Links
Obama Crackdown on For-Profit Colleges Faces Stiff Resistance

Comments

  1. edman101 says

    The real question is did he con the governement into this or did the government pull him into this to hurt the for profits???

  2. ah_but_wait says

    Did the government pull him into this? Do people really think the government has been monitoring this closely, decided enough was enough and action was necessary, and needed to call the private sector to intervene? I would say that’s not likely.

    Eisman is doing the same thing he did when he shorted the sub prime market – he spoke somewhat openly about it. Except in that case, nobody believed him. Did he then cause the mortgage backed securities market to collapse? Definitely not. Did he make some cash? You bet.

    Here he is speaking out against the second biggest problem in education today (the first being parents). The detestable loan practices that have single handedly priced higher education out of reach for so many. And very average institutions like Corinthian Colleges (please) are charging outrageous sums for mediocre services simply because they can. It’s corrupt and evil and despicable, and if someone stands to make some money off of seeing that system fail, that’s fine by me.

    Eisman has shown himself to be in the top 1% of all financial analysts out there. The fact that he smells something fishy should concern you. He is using his voice to call attention to a big injustice, and I hope there’s a big payday in it for him.

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