WASHINGTON – Further investigation into allegations of shady stock movement between a preferred student lender and university financial aid directors have revealed more evidence indicating securities law wrongdoings.

Sen. Edward Kennedy’s office has examined documents obtained in the investigation implicating the transfer of stock in student loan company Student Loan Xpress as gifts, despite one of the directors previously stating he had legally bought his shares. Sen. Kennedy is calling upon federal regulators to investigate the transactions.

According to Senate aides, in a document titled “memorandums of gift,” Fabrizio Balestri, president of Student Loan Xpress, wrote that he gave away 80,000 shares to 16 people on Dec. 31, 2001. As reported in a previous CS news item, two of the three financial directors initially implicated owned as many as 1,500 shares, and one owned 7,500 shares. It is not yet known what became of the remaining shares.

All three financial directors involved – Lawrence Burt, associate vice president and director of student financial aid at the University of Texas in Austin, David Charlow, Columbia University’s executive director of financial aid, and Catherine Thomas, associate dean of admission and director of financial aid at the University of Southern California – as well as General Manager in a unit of the Office of Federal Student Aid at the Department of Education Matteo Fontana have been placed on leave by their respective employers. Balestri was also placed on leave by CIT Group, current parent company of Student Loan Xpress. CIT Group was not the lender’s parent company at the time of the alleged illegal transactions.

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