The U.S. Securities and Exchange Commission on Friday said it settled a lawsuit against two former ITT Educational Services executives accused of hiding the defunct for-profit college operator’s actual financial condition from investors.
The settlements with former Chief Executive Officer Kevin Modany and former Chief Financial Officer Daniel Fitzpatrick came ahead of a trial scheduled for Monday in federal court in Indianapolis, Indiana.
The deal came after the SEC’s commissioners took the rare step last year of rejecting an earlier proposed settlement negotiated between the defendants and the agency’s staff.
Under Friday’s settlements, both men agreed to be barred from serving as officers and directors of publicly-traded companies for five years. Modany and Fitzpatrick will also pay penalties of $200,000 and $100,000, respectively.