Since January of ’09, Citron Research has been warning about the questionable business practices of Apollo Group (owner of University of Phoenix):

Count on the Obama administration to take a fresh, critical look — as the largest single recipient of Student loans in this country is a for-profit institution whose insiders have sold hundreds of millions of dollars of stock while collecting over 75% of their revenue from government guaranteed loan funds, while delivering an education of questionable value amid a history of unsavory business practices.

Well, after-hours today the WSJ reports that the SEC is investigating some of Apollo’s revenue-recognition practices. The result? APOL down 17% after hours.

Apollo Group Inc. said the Securities and Exchange Commission has launched an informal inquiry into its revenue-recognition practices.

Apollo, whose University of Phoenix is the country’s largest private college and has benefited from the economic downturn, reported fiscal fourth-quarter results Tuesday that beat Wall Street estimates. But news of the probe, its second this year, sent its shares tumbling in late trading.

Finance Chief Brian Swartz said in a conference call with investors Tuesday that the company believes “that our revenue recognition policies are appropriate and in accordance with GAAP.” He added that it didn’t have “any further insight” into the probe.

For-profit colleges have come under fire numerous times for their methods of recognizing revenue, most of which is derived from government loans. Apollo received a letter from the SEC’s Division of Corporate Finance related to its revenue recognition in February and said in its conference call that, “to our knowledge,” it answered all of that division’s questions. The current probe comes from the SEC’s Division of Enforcement.

Apollo said that it took an $80.5 million charge in its fourth fiscal quarter to cover the costs of a possible settlement of a whistleblower’s suit pending in U.S. District Court in Sacramento, Calif. The suit alleged that Apollo owed the government refunds on billions in financial aid funds because it allegedly paid recruiter incentives based on the number of students they enroll. Federal education law bars such incentive payments.

Disclosure: Short APOL