SANFORD BROWN SCHOOLS

External inquisitions: you would be wise to consider this company's recent past. Below are just a few of the more unwelcome developments:The U.S. Department of Education has refused to approve CECO's applications for new locations until it completes its review of the company's "restated" financial reports. The Equal Employment Opportunity Commission is investigating charges that women were subjected to sexual harassment.The SEC's "enforcement division" is still looking at CECO's 10-K filings for 2003 and 2004. In a 60 Minutes expose that aired on Jan. 30, 2005, former admissions representatives admitted that they "were really salespeople," expected to enroll three high school graduates a week, "regardless of their ability to complete the coursework." Finally, the Department of Justice has been analyzing a slew of lawsuits by former students, investors, and employees -- including Vinod Kapoor, a former faculty member at AIU in Los Angeles. Kapoor filed a wrongful termination suit against CECO after he was fired in March 2004 for complaining that he was pressured to keep failing students on his class list so that the school could continue to receive federal funds, and that many students in his classes did not have high school degrees, had no intention of attending classes, and were sometimes simply fictitious names on the roster.Their recruitment and enrollment procedures are meanspirited. Despite the litany of problems, CECO is nonetheless outperforming the industry as a wholeis fighting gainst its current litigation headaches. At the end of June, the company announced that a federal court dismissed a civil lawsuit alleging that the company submitted a false claim for payment to the federal government.(that was the only rock they looked under) a class action suit against the CEC online campus, brought by three former admissions officers who claimed they were denied overtime pay (although,this happens frequently).