Rappaport was in the front of the classroom and three bikini-clad and miniskirted women were on top of him giving him a lap dance, according to Brad Bernardino, a sophomore at La Salle who attended the March 21 session. At various other times, Bernardino added, the strippers gave willing students lap dances, and a PowerPoint presentation related to business ethics ran in the background.
"I think everybody was in shock that it happened," Bernardino said.
Officials at La Salle University, a Catholic university in Philadelphia, said they were "very concerned" about the allegations and have "launched a full-scale investigation into what took place and who was responsible."
"Until the investigation has been completed," the university said in a written statement, "it would be unfair to those involved to disclose any further information, let alone suspicions or allegations. While the university is proceeding as quickly as possible, we recognize the importance of guarding against a rush to judgment in this situation."
The 57-year-old Rappaport's seminar reportedly cost each student $150 to attend and earned the students extra credit in Rappaport's business class.
Rappaport's biography on the La Salle University website says he has been an assistant professor of business management there since 1979.
"I try to enrich my teaching by using interesting real life applications such as the use of the horse race betting market in the teaching of statistics," Rappaport writes on his personal page.
Emails and calls to Rappaport by ABCNews.com were not returned today.