SAN FRANCISCO (Reuters) - The state of California filed suit against Corinthian Colleges Inc for misrepresenting job placement rates to its students and investors, employing false and predatory advertising, and for securities fraud, according to a court filing on Thursday.
The lawsuit was filed in San Francisco superior court on Thursday against the company and its subsidiaries that operate Everest, Heald and WyoTech colleges.
Corinthian, which describes itself as one of the largest post-secondary education companies in North America, said it would fight the suit.
For-profit colleges have come under fire in recent years for having poor track records in helping students find employment. Some of the colleges have faced lawsuits that alleged they inflated job-placement statistics. The institutions have called such accusations unfounded.
The California complaint alleges that Corinthian intentionally targeted low-income, vulnerable individuals through deceptive and false advertisements and aggressive marketing campaigns that misrepresented job placement rates and school program.
"Corinthian has engaged in conduct that has done nothing but break these individuals down," California Attorney General Kamala Harris told reporters.
"The complaint further alleges that Corinthian executives knowingly misrepresented job placement rates to investors and accrediting agencies, which harmed students, investors and taxpayers," according to a statement from the attorney general's office.
Harris said Corinthian has 81,000 students, 27,000 of whom are in California, and added that her office is conducting a broader investigation into for-profit colleges.
Corinthian promised a vigorous defense against the complaint.
"We have been cooperating extensively with the Attorney General's office for nine months, as we have previously disclosed," spokesman Kent Jenkins said in an emailed statement. "We were not given advance notice of today's complaint and have not had the chance to review it in detail."
"We are committed to regulatory compliance and have robust processes in place to correctly record and disclose the job placement information we receive from our graduates and their employers," he added.
Harris declined to specify the total damages sought from Corinthian, or discuss whether her office had been in settlement discussions with Corinthian before filing a lawsuit.
(Reporting by Dan Levine; Editing by Bernard Orr and Eric Walsh)