DOW JONES NEWSWIRES
Apollo Group Inc. (APOL), parent of the University of Phoenix,
agreed to pay the U.S. government $67.5 million to end a
long-running dispute involving compensation practices at the
for-profit university.
Shares had been rising throughout the day Monday and were
recently at their session highs, up 8.1% at $61.14.
Co-Chief Executive Charles Edelstein said the agreement would
help the company avoid "protracted litigation" and "opens the door
for a more constructive partnership with our lead regulator, the
U.S. Department of Education."
A separate agreement provides Apollo will pay $11 million in
attorneys fees to the plaintiffs.
The litigation stemmed from a 2003 lawsuit by two private
plaintiffs that alleged the school violated regulations stating
that while recruiters may be compensated based in part on the
number of students they enroll, it cannot be the sole factor for
determining their compensation.
After a review of the allegations, the Department of Justice
declined to join the litigation. Still, federal investigators
detailed several examples of compensation and sales practices that
the government said were illegal or unethical.
On Monday, Apollo said the agreement didn't acknowledge any
wrongdoing or admission of liability, as the company defended its
fully compliant compensation practices.
Apollo, which provides higher education programs for working
adults, has more than 50 campuses and 85 learnings centers.
-By John Kell, Dow Jones Newswires; 212-416-2480;
john.kell@dowjones.com