Phoenix: SEC Inquiry of Apollo Group Underway

Apollo shares drop as SEC starts inquiry

Arizona Star 10/29/09

Phoenix-based Apollo Group Inc. , the biggest publicly traded U.S. educator, plunged the most in more than 19 months in New York trading after the company said its accounting is being investigated by the U.S. government, Bloomberg News reported.

The Securities and Exchange Commission’s Enforcement Di­vision has begun an informal probe of Apollo’s “revenue recognition,” the company said Tuesday in a written statement. The company also expects to pay about $80.5 million in settle­ment and legal costs for a lawsuit related to its recruitment prac­tices, the statement said.

Apollo runs the University of Phoenix , the nation’s largest private university with 443,000 students, most of whom take classes via the Internet. Federal student aid accounted for about 86 percent of company revenue in fiscal 2009, Apollo said.