October 27, 2021

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

BMO Conference was Packed as expected!

Yesterday was the BMO annual Back to School conference in NYC.  As expected in this active political climate relating to the sector,  it was packed.  First I want to congratulate BMO for the excellent job they did, they not only put out a great agenda with the top tier participants, they also provided a quality environment for networking, private discussions and of course plenty of food & beverage. 

Almost every session was standing room only with people listening closely to what the power players were saying relating to current operations, government proposed changes and the potential effects on their businesses.  Also it was great to hear such organized demonstrations of the faults inherent within the proposed rule making.  I only wish many of the news outlets would broadcast those messages before the proposed changes become rules.  While CNBC was there networking and doing some interviews we have yet to see many of the concrete negative attributes of the proposed changes made public with the national media.  Hopefully that will change soon. 

Clearly there are many conflicts with the governments intended goals regarding educating America and the actual negative outcomes the proposed rules will result.  Who is going to push the value of college to those consistently neglected.  Who is going to take the risk of trying to educate those who need it most, but represent the biggest default risk?  Clearly there are many conflicts with the discussions relating to the cost/waste of tax payers money on the forprofits and the reality of actual cost to the tax payer without them.  Clearly they are not comparing apples to apples with the facts and figures, rather shouting sound bites and political buzz words to seek attention in the active political climate.

Also, Steve Eisman the industry short attended some of the conference, what are the odds his mind was open to any of the data presented…