APOL Apollo Education Grp., Inc.

The U.S. Supreme Court on Monday rejected Apollo Group Inc.'s (APOL) challenge to a jury verdict that found the for-profit college company had committed securities fraud.

The case centered on allegations that Apollo's stock price was artificially inflated because management concealed details of a 2003 U.S. Department of Education report that found recruiter compensation at its University of Phoenix violated federal regulations. The original suit was filed in October 2004.

A jury ruled for the plaintiff investors, handing down a penalty of as much as $5.55 per share. The total amount will depend on how many shareholders file claims, though an early estimate came out to about $278 million.

A trial judge later threw out that jury verdict, but a San Francisco-based appeals court reinstated it last year.

In its appeal to the Supreme Court, Apollo said the jury verdict could not stand because the company's share price didn't drop until a week after news reports of the department's review had emerged. Shares ultimately slipped after the media attention and a negative report and downgrade by analysts at UBS AG (UBS), but Apollo said the analyst report couldn't support a securities fraud suit.

Apollo set aside $177.1 million in reserve in 2010, saying damages likely will range from $127.2 million to $228 million. The company recorded an additional $900,000 in its fiscal first quarter.

Apollo settled with the Education Department in 2004 for $9.8 million.

The Supreme Court denied Apollo's challenge without comment, and Apollo had no immediate comment.

The case is Apollo Group v. Policemen's Annuity and Benefit Fund of Chicago, 10-649.

-By Brent Kendall, Dow Jones Newswires; 202-862-9222; brent.kendall@dowjones.com

-Melissa Korn contributed to this story

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