Court reinstates fraud claim against Trump University

Donald Trump suffered a legal setback Tuesday when a New York State appeals court reinstated a fraud claim against Trump University in a lawsuit by Attorney General Eric Schneiderman.

The ruling by a four-judge panel in Manhattan means Trump University must now defend against two fraud claims in Schneiderman’s 2013 case.

The restored fraud claim allows the attorney general to seek certain monetary penalties against the school.

Schneiderman sued Trump University in August 2013, alleging the school swindled students out of $40 million by operating an unlicensed educational institutional and misleading students by promising they would gain real estate investing expertise.

The court’s ruling did not address the facts of the case and focused solely on legal principles.

This story was originally published March 1, 2016 at 11:40 AM with the headline "Court reinstates fraud claim against Trump University."