Dive Brief:
- A U.S. appeals court has sided with a lower court’s decision against Oregon in the state’s lawsuit against the for-profit owner of the University of Phoenix.
- Oregon had sued Apollo Group Inc. and its executives, alleging that they lied about the company’s student enrollment, revenue growth, financial condition, and business focus.
- Both the lower district court and the U.S. Court of Appeals for the Ninth Circuit ruled that Apollo’s statements were lawful “business puffing.”
Dive Insight:
Oregon had also accused Apollo executives of insider trading, but the courts ruled that the state had failed to make its claim because the supposed inside information was the same as the alleged false statements. Oregon had claimed in its lawsuit that the Apollo actions led to a $10 million loss for its pension fund, which invested in Apollo stock. The state had sued under U.S. Securities and Exchange Commission regulations.