Early Word on a Contract May Have Helped Investors Cash In

On Jan. 11, a group of 42 debt collection agencies awaited word on which ones had won contracts from the U.S. Department of Education. The federal government has been the main lender to student borrowers since 2010, and the deal to collect on unpaid student loans could be worth hundreds of millions of dollars.

Shortly after 1:30 p.m., an Education Department employee sent emails to 40 of the companies to let them know they weren’t among them. The agency publicly announced the winners in a court filing at 3:47 p.m. During the time in between, investors bought up shares of one of the winning bidders, Performant Financial Corp., a Livermore, Calif., company that once had financial ties to Secretary of Education Betsy DeVos. The company’s stock jumped almost 20 percent from the time the department started notifying bidders about the contract to when the news was made public.