- Current report filing (8-K)
September 11 2009 - 4:42PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported):
September 11, 2009
BRIDGEPOINT EDUCATION, INC.
(Exact name of registrant as specified in charter)
Delaware
(State or other
jurisdiction of
incorporation)
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001-34272
(Commission File Number)
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59-3551629
(IRS Employer Identification
No.)
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13500
Evening Creek Drive North, Suite 600
San
Diego, California
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92128
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(Address of
principal executive offices)
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(Zip Code)
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(858) 668-2586
(Registrants telephone number, including area code)
None
(Former name or former address, if changed
since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
o
Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant
to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant
to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 7.01
Regulation
FD Disclosure.
On September 11,
2009, we issued a press release announcing that we filed with the Securities
and Exchange Commission to withdraw our registration statement for a proposed
secondary public offering of shares of our common stock. The registration statement was initially
filed with the Securities and Exchange Commission on August 26, 2009. The information contained in the press
release is incorporated herein by reference and furnished as Exhibit 99.1.
The information in this Item 7.01 shall not be deemed filed for the
purposes of Section 18 of the Securities Exchange Act of 1934, or the
Exchange Act, and shall not be deemed to be incorporated by reference into any
filing under the Securities Act of 1933, or the Exchange Act, except to the
extent that we specifically incorporate it by reference.
Item 8.01 Other
Information.
The registration statement that we withdrew on September 11, 2009 (see
Item 7.01 above) contained the risk factors set forth below related to the
update we received from the U.S. Department of Education's Office of Inspector
General. These risk factors were included
in Amendment No. 1 to the registration statement, which amendment we filed on
September 4, 2009. We are including
these risk factors below so that they will be filed under the Exchange Act and
applicable rules and regulations following the withdrawal of the registration
statement.
The U.S. Department of Education's Office of
Inspector General has conducted a compliance audit of Ashford University and
has preliminarily advised us of certain areas of noncompliance.
The U.S. Department of Education's Office of Inspector General, or OIG,
is responsible for promoting the effectiveness and integrity of the U.S.
Department of Education's programs and operations. With respect to educational
institutions that participate in Title IV programs, the OIG conducts its work
primarily through an audit services division and an investigation services
division. The audit services division typically conducts general audits of
schools to assess their administration of federal funds in accordance with
applicable rules and regulations. The investigation services division typically
conducts focused investigations of particular allegations of fraud, abuse or
other wrongdoing against schools by third parties, such as a lawsuit filed
under seal pursuant to the federal False Claims Act.
The OIG's audit services division commenced a compliance audit of
Ashford University in May 2008, covering the period March 10, 2005 through June
30, 2009. The scope of the audit covered Ashford University's administration of
Title IV program funds, including compliance with regulations governing
institutional and student eligibility, awards and disbursements of Title IV
program funds, verification of awards, returns of unearned funds and
compensation of financial aid and recruiting personnel. On September 2, 2009,
the OIG notified Ashford University of its completion of field work and
informed us that its tentative findings include certain instances of
noncompliance with provisions of the Higher Education Act and regulations
governing Ashford University's administration of Title IV programs.
Specifically, the OIG preliminarily identified the following areas of
noncompliance:
·
compensation
policies and practices with respect to enrollment advisors;
·
calculation
of returns of Title IV program funds;
·
timeliness
of returns of Title IV program funds;
·
student
authorizations to retain credit balances;
·
disbursements
of unearned Title IV program funds; and
·
maintenance
of supporting documentation for students' leaves of absence.
The OIG's findings are preliminary and remain under review by the staff
of the OIG. While we believe Ashford University operates in substantial
compliance with the regulations of the U.S. Department of Education which are
applicable to the areas under review, due to the preliminary nature of the
OIG's findings, we cannot predict the extent of the OIG's ultimate findings.
However, we expect that the OIG's draft report will assert findings of
noncompliance and if such findings are included in the OIG's final report could
result in recommendations that the U.S. Department of Education's Office of
Federal Student Aid impose fines on Ashford University and require Ashford
University to take corrective action.
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The OIG expects to issue its findings in a draft audit report at the
end of September 2009, and Ashford University will then have thirty days to
submit responses to the OIG's tentative findings. After the OIG has considered
our responses, the OIG will issue a final audit report, which will contain the
OIG's final findings and any recommendations to the Office of Federal Student
Aid based on those findings. If the OIG identifies instances of noncompliance
in its final audit report, the Office of Federal Student Aid would determine
what action to take, if any. Such action could include requiring Ashford
University to modify its Title IV administration procedures or its practices
with respect to the compensation of its enrollment advisors, assessing a
monetary liability for the return of Title IV program funds or the commencement
of an administrative action to impose potentially significant fines or to
limit, suspend or terminate Ashford University's Title IV participation. In the
event that the office of Federal Student Aid assessed any monetary liabilities
or commenced an administrative action, Ashford University would pursue fully
its administrative remedies. Because of the ongoing nature of the OIG audit, we
cannot predict the ultimate extent of the draft or final audit findings or the
potential liability or remedial actions that might result. Such findings and
related remedial action may have a material adverse impact on our reputation in
the industry, our cash flows and results of operations, our ability to recruit students
and our business.
Our schools may be sanctioned or subject to
lawsuits if they pay impermissible commissions, bonuses or other incentive
payments to individuals involved in certain recruiting, admissions or financial
aid awarding activities.
An institution that participates in Title IV programs may not provide
any commission, bonus or other incentive payment based directly or indirectly
on success in securing enrollments or financial aid to any person or entity
engaged in any student recruitment, admissions or financial aid awarding
activity. Although the U.S. Department of Education's regulations set forth 12
"safe harbors" which describe compensation arrangements that do not
violate the incentive compensation rule, including the payment and adjustment
of salaries and bonuses under certain conditions, the law and regulations do
not establish clear criteria for compliance in all circumstances, and the U.S.
Department of Education no longer reviews and approves compensation plans prior
to their implementation. If one of our institutions were to violate the
incentive compensation rule, it would be subject to monetary liabilities or to
administrative action to impose a fine or to limit, suspend or terminate its
eligibility to participate in Title IV programs, which would have a material
adverse effect on our enrollments, revenues and results of operations.
Additionally, several of our competitors have been faced with lawsuits
brought by current or former employees pursuant to the federal False Claims Act,
alleging violations of the incentive compensation rule. Defending a False
Claims Act lawsuit could be costly and could divert management's time and
attention from our business, regardless of whether the claim has merit. The
adverse resolution of such a lawsuit could lead to monetary liability,
including treble damages and attorneys' fees, and other sanctions, which could
have a material adverse effect on our business, results of operations and
financial condition.
Item 9.01
Exhibits
and Financial Statements.
(d)
Exhibits.
99.1
Press release dated September 11,
2009.
2
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, as amended, the registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
Date:
September 11, 2009
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Bridgepoint
Education, Inc.
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By:
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/s/ Daniel J. Devine
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Name: Daniel J.
Devine
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Title: Chief Financial
Officer
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