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Investors spank CLC stock
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March 11, 1998: 2:02 p.m. ET
Computer Learning shares hit after Illinois alleges school misbehavior
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NEW YORK (CNNfn) - Computer Learning Centers Inc. was taught a hard lesson by investors Wednesday after legal action was taken against one of its computer training schools.
Shares of Computer Learning (CLCX) plunged 9-1/16 to 20-9/16 in early afternoon trading on the Nasdaq stock market Wednesday.
(Chart CLC's stock movement Wednesday)
Illinois Attorney General Jim Ryan filed suit Tuesday against Computer Learning, which offers computer-related education and training at 25 schools.
Ryan alleged that its Schaumburg, Ill, campus made unrealistic promises of high earning potential and great job placement to entice students into paying up to $13,000 in tuition.
"When students enrolled, they often found overcrowded classrooms, unprepared instructors and few computers, books or other necessary materials," said Ryan.
Reid Bechtle, chief executive officer of the Fairfax, Va.-based Computer Learning, said the allegations applied only to the Schaumburg school and don't affect any of his company's other schools.
Bechtle also claimed that the Schaumburg CLC campus met all the requirements of federal and state standards.
"We intend to vigorously defend ourselves against these allegations," he said. "We will continue to serve the best interests of students and employers in and around the Schaumburg area as we have done since 1994."
The Illinois attorney general said his agency began an investigation after the state's board of education notified Ryan that it had received numerous complaints about the Schaumburg facility.
According to Ryan, the investigation found violations of consumer protection laws in advertising flyers, admission forms, and during introductory seminars including:
- Misrepresenting the transferability of CLC credits to other colleges.
- Misrepresenting expected starting salaries for graduates.
- Misrepresenting job placement statistics.
- Failing to provide sufficient learning equipment including computers and other materials.
Illinois asked the court to suspend CLC's charter from the state's board of education and is seeking restitution, a civil penalty of $50,000 and an additional $50,000 for each of what it alleges are violations of the Consumer Fraud and Deceptive Business Practices Act. 
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