Bloomberg Businessweek

A Federal Contract, an Email, And a Big Stock Move

Did traders get early word of Performant’s student loan deal?

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 employee from the Education Department sent emails to 40 of the companies to let them know they weren’t chosen. 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

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