The U.S. Securities and Exchange Commission has accused one of the country’s largest for-profit college operators of lying to investors to hide the “abysmal” performance of its student loan programs.

Indiana-based ITT Educational Services, its CEO Kevin Modany and CFO Daniel Fitzpatrick were charged with fraud on Tuesday by the SEC in a lawsuit filed in U.S. District Court for the Southern District of Indiana, Indianapolis Division.

“Our complaint alleges that ITT’s senior-most executives made numerous material misstatements and omissions in its disclosures to cover up the subpar performance of student loans programs that ITT created and guaranteed,” said Andrew J. Ceresney, director of the SEC’s Division of Enforcement.  “Modany and Fitzpatrick should have been responsible stewards for investors but instead, according to our complaint, they engineered a campaign of deception and half-truths that left ITT’s auditors and investors in the dark concerning the company’s mushrooming obligations.”

The SEC is seeking an injunction barring ITT from continuing or repeating the alleged violations, orders prohibiting Modany and Fitzpatrick from serving as officers or directors of any publicly traded company, an order forcing ITT to disgorge any unlawful gains with interest, an order requiring the executives to reimburse ITT for any bonuses, incentives or equity-based compensation, and the payment of unspecified civil penalties, According to the lawsuit.

ITT Educational Services owns and operates ITT Technical Institute, a for-profit college offering two- and four-year degrees at over 130 campuses in 38 states. The school’s campuses have regularly posted some of the highest student loan default rates among American universities, with several campuses reporting default rates higher than graduation rates.

The company claimed that the SEC’s action was “mistaken” and said that it will fight the charges in a statement on Tuesday.

“We vehemently disagree with the SEC's position and we are confident that the evidence does not support the SEC's claims,” the company announced. “We are eager to have the court clear our reputation that has been unnecessarily endangered by the SEC's action.”

Following the collapse of the private student loan market, ITT established two loan programs, known as “PEAKS” and “CUSO,” to provide off-balance sheet loans at the company’s campuses.

ITT provided a guarantee that limited any risk of loss to attract third parties to finance the loans, the SEC alleged.

The underlying loan pools performed so poorly that ITT’s guarantee obligations were triggered and began to balloon.

The SEC complaint said that rather than notifying investors that the company projected paying hundreds of millions of dollars on the guarantees, ITT, Modany and Fizpatrick allegedly engaged in a fraudulent scheme, making a number of false and misleading statements to hide the magnitude of the guarantee obligations.

For example, ITT regularly made secret payments on delinquent student borrower accounts, temporarily keeping the PEAKS loans from defaulting and triggering tens of millions dollars of guarantee payments, the SEC alleged.

The company also netted its anticipated guarantee payments against recoveries projected for many years later without telling investors of the near-term cash impact and misled and withheld significant information from the company’s auditor, the SEC charged.

ITT disputed the charges in its statement.

“The SEC takes issue with ITT’s handling and disclosure of complex accounting issues that arose several years ago,” ITT announced. “Throughout the relevant time period, we repeatedly expanded our disclosures in an effort to present material information to investors. We also repeatedly conferred with outside experts, as well as our outside, registered independent auditor. We shared extensive information with these experts to confirm that our accounting treatment was reasonable and appropriate. The company's robust record of consultation and deliberation rebuts any allegation of wrongdoing.”

In February 2014, the U.S. Consumer Financial Protection Bureau charged ITT with alleged predatory lending practices, a matter that is making its way through federal courts.

In 2014, as ITT began to disclose the consequences of its practices, the company’s stock price lost about two-thirds of its value.