Here is the dismissal order (PDF).
Did you know that Miller is a defendant in a lawsuit against the executives and directors of ITT Technical Institute? Apparently the officials cooked the books to increase the stock price of the firm. When ITT learned that this deception would soon be made public, people (including our boy Miller) sold their stocks before the inevitable drop in their stock. Miller's received $934,000 for his stock. The suit was filed by the City of Austin Police Retirement System as Civil Action No.: 1:04-cv-00380-DFH-TAB in the U.S. District Court, Southern District of Indiana, Indianapolis Division. Check out http://techpol.blogspot.com/2006_01_01_techpol_arc hive.html which has a link to the suit itself.
Some excerpts from the suit include the following.
========================================
... ITT publicly touted its business and financial performance, the performance of its stock price, and its ability to enroll and keep students in its institutes to entice investors to purchase its stock... These representations, however, were materially false and misleading and they failed to disclose to the investing public that ITT had been regularly falsifying records used as indicators of its operational success ... The strong growth reported by the Company throughout the Class Period was grounded upon these fraudulent and inherently unsustainable practices, rendering ITT's reported financial historical performance and projections of future growth materially false and misleading.
.. .
Defendants used a host of tricks to falsify student information, including inflating enrollment figures, counting students as enrolled who never attended ITT, double counting enrollees, changing and falsifying grades, and misrepresenting attendance and placement rates.
...
Defendant Harris N. Miller ... served as a Director of ITT since July 1999 and has been a member of the Audit Committee since 2001.+âGÇÜ During the Class Period, Miller sold 18.000 shares of ITT common stock for proceeds of $934,400. Defendant Miller signed the Company's Forms 10-K for fiscal years 2002 and 2003. [In addition to Harris being a Director, he was also a member of the Audit Committee which had special responsibility for oversight of the integrity of ITTs financial statements and other financial information.]
One of my favorites:
http://www.thestreet.com/comment/herbonthestreet/929890.html
According to a report by Nadel, who declined to comment on the record, the recruiters also steer potential students to the Web site of the Information Technology Association of America, the tech school industry's trade group, which talks about industry salaries. (The trade group's president, Harris Miller, as it turns out, is also on ITT's board. I couldn't get a hold of Miller, who didn't return two calls over the past two weeks, so we'll refrain from asking what the prez of a trade group is doing as a director of one of its member companies.)
Virginia has a conflict of interest with Harris Miller
http://www.raisingkaine.com/showDiary.do?diaryId=2126
This post is no longer available, I hope, because of what I relayed in a reply. Specifically, regarding the ITT issue, Lowell linked the Complaint but he did not link Judge Hamilton’s Order to Dismiss.
Just like Lowell’s April Diary, you are referring to the Complaint but you are not providing Judge Hamilton’s Order to Dismiss.
In April, I responded with the following. The same applies with this Diary, and it is wrong for you (or anyone else) to throw out allegations on this matter without all of the facts:
Regarding the ITT issue, you linked the Complaint but you did not link Judge Hamilton’s Order to Dismiss. You’ll find that Harris Miller was not only vindicated, but the alleged charges were disturbingly false—twisted to support assumptions rather than facts alone. The Order was not too kind to the Claimants. It’s a pretty damning read.
http://www.insd.uscourts.gov/opinions/AN3800O2.PDF
From page 39-40: Plaintiff also relies on the fact that the individual defendants benefited financially from higher stock prices. As many courts have observed, nearly all for-profit corporations compensate executives for successful financial performance as measured in the stock market, so this fact does not support a strong inference of scienter. Judge Moran has explained: “If scienter could be pled solely on the basis of plaintiff’s allegations that defendants were motivated to defraud the public in order to inflate the stock price, ‘virtually every company in the United States that experiences a downturn in stock price would be forced to defend securities fraud actions.’” …In this case, the records of the defendants stock sales do not show any unusual pattern that would lend any support to an inference of scienter.
Oh, and by the way. ITT’s stock (Ticker ESI) surpassed the $57.40 per share mark prior to Harris Miller’s resignation from the board in January (to run for Senate). In other words, the stock returned to, then surpassed the February 2004 pre-corporate crisis stock price of $57.40 (it dropped to $38.50 in one day). It seems that Mr. Miller was a very good board member to that company, its stock holders, and its employees.
Bloombeg report:
Additional sellers were Clark Elwood, senior vice president and general counsel, who sold 161,666 shares for $4.1 million; Thomas Lauer, former senior vice president who sold 120,000 shares for $4.9 million; Gene Baugh, former chief financial officer, who sold 67,500 shares for $1.7 million; Martin Grossman, senior vice president, who sold 10,000 shares for $484,000; and Harris Miller, an outside director and president of the Information Technology Association of America, who sold 18,000 shares for $932,000.
Elwood and Grossman declined comment through company spokeswoman Brown. Lauer said in an interview that he was aware of the California investigation when he sold and declined further comment. Baugh wasn't available for comment, and Miller declined comment.
Insider Purchases
The only purchases since ITT Educational learned of the attorney general's investigation were made by two outside directors that joined the company's board in October 2003. Joanna Lau, chief executive of Lau Technologies in Littleton, Massachusetts, bought 200 shares on Feb. 13, 2004. John Cozzi, 42, managing director of Arena Capital Partners LLC of New York, bought 2,000 shares on Jan. 30. Neither returned telephone calls seeking comment.
So the Austin Police couldn't prove their case against Mr. Miller. Water under the bridge at this point.
Still, Mr. Miller could answer some questions (now that a suit no longer hangs over him?):
1) Did Mr. Miller know about the search and think it would materially affect stock price? Why did he sell? [ the stock answer is "college for my kids" ]
2) What is Mr. Miller doing on the board while serving as ITAA head?
Perhaps he could return the reporters calls.
I don't think it is appropriate to bring this up.
Two issues remain:
1) The stock sale? Why?
2) Serving on the ITT board of directors while representing competitors on ITAA.
If he addresses them satisfactorily, then the issue may close for good.
He'll answer #1 with "cuz I felt like it". Which is okay as long it doesn't turn out to be false.
He'll answer #2 with "It's not a big deal". Which is again okay as long Mr. Miller himself says it and no one can demonstrate that he was serving two masters with different agendas.
He's lucky he's probably going lose on Tuesday because Allen would ask these questions.
Of course politically you can make hay out of whatever you please. Miller made hay out of the cartoon rubish - but perhaps it is best not to sink to his level. Also, his horrific actions just may backfire.
ITT Settles California Fraud Probe
October 22, 2005
ITT Educational Services Inc., which operates ITT Technical Institutes across the country, agreed to pay $725,000 to settle an investigation by the California attorney general’s office.
Miller talking about pouring money into education for adults, and the for-profit schools are consistent with his platform. They are largely funded with tax dollars.
It looks like there was a number of complaints and lawsuits in many states because of problems with several of these schools. Not ITT, but one of the other schools was in some trouble for aggressive recruiting outside of welfare and unemployment offices.
I agree with Kathy Gerber. Let's not revisit this now. (And I'm not a troll, but a diarist on this blog and enthusiastic Webb supporter.) Vote Webb, leave the sludge in the Miller camp.
Very quick to counter. Part of the Miller rapid response team?
They seem pretty sensitive to the questions raised.
I have no problem with Miller supporters providing quick and reasonable defense for anything he is accused of. Perfectly fair.
On the other hand, the trolls are quick to jump in but provide no real value to the discussion.