The investors who are suing a for-profit education company for securities-law violations have raised new allegations of wrongdoing against the New York company, including accusations that it fired employees who failed to meet enrollment quotas. The company, the EVCI Career College Holding Company, has been under investigation by New York state officials for activities at its Interboro Institute, a college that specializes in enrolling students eligible for financial aid who lack a high-school diploma but show an ability to benefit from higher education.

State offiicials have said the college seemed more interested in enrolling the students than in making sure they succeeded in college (The Chronicle, December 7, 2005). Earlier this year, state officials cited the activities at Interboro as grounds for tougher new policies to govern for-profit colleges (The Chronicle, June 2).

In their latest filing in the lawsuit, the investors say that the wrongdoing at Interboro was more widespread than first suggested by the New York state investigations, according to an article today in The New York Times. The investors, led by the Arkansas Teachers Retirement System, are suing the company in federal court in New York, asserting that it misrepresented its finances and prospects. The company has said any wrongdoing was isolated. In May, the company disclosed that it had hired an investment bank to help it identify “strategic financial and business alternatives,” which typically means it is looking to be acquired or to find a merger partner.