GO
Loading...

Head of For-Profit Schools Group Blasts Steve Eisman

Rule No. 1 for companies engaged in battles with short-sellers should be: Don’t attack them and if you do—don’t make it personal. Doing so is often viewed as trying to divert attention away from the issue.

That’s why I was surprised to see just that in a press release from Harris Miller, president of the Career College Association, which represents the for-profit post-secondary education industry. His comment, posted on the Career College Education’s website, was in anticipation of a hearing scheduled for 10 a.m. Thursday morning at the Senate Committee on Health, Education, Labor and Pensions.

He wrote: “What we will hear from one of the witnesses—a Wall Street short-seller born with a silver spoon in his mouth, who got his first big paycheck the old fashioned way, through his parents—will be self-serving attacks on non-traditional students designed to fatten his wallet, not to inform the American people on how best to get unemployed and underemployed Americans educated and back to work.”

The short-seller, Steve Eisman of FrontPoint Parnters, is perhaps best known as being immortalized in Michael Lewis’ book, “The Big Short: Inside the Doomsday Machine,” as having warned about the sub-prime mess when nobody cared.

Now Eisman’s focus, which he detailed last month at the Ira Sohn Investment Conference in New York: The for-profit subprime industry, which for years has been engaged in an on-again-off-again tug-of-war between the shorts and longs. The title of his 48-page report: “Subprime Goes to College.”

Among the companies he mentioned: Apollo Group, ITT Education and Corinthian Colleges.

Eisman is among those who will testify.

In a 45-minute conference call Wednesday directed at Eisman’s testimony, Harris disputed Eisman’s claims. “Comparing the for-profit career college sector to the subprime mortgage banking industry is as silly as it is simplistic,” he said.

Or not. Stay tuned.

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More

Don't Miss

U.S. Video

  • The "Squawk on the Street" news team prepare for Alibaba to come public on the NYSE. CNBC's Jim Cramer is shocked by the demand of mutual funds worldwide for this IPO.

  • This Nashville antebellum estate is a true Southern Belle. Built in a Greek-revival style, it has a two-story colonnade that wraps almost entirely around the house. You may find yourself seduced by one of the many rocking chairs you'll find on the terrace. There you can relax for hours, looking out over the estate's more than five acres of land. But just wait until you walk through the French doors into the foyer. There you will see a three-story elliptical staircase that may look familiar. (It appeared on the TV series Nashville.) Y'all will never want to leave.

  • CNBC consumer reporter Kelli Grant offers tips on how to get the best deal on car insurance