PHILADELPHIA, Dec. 3, 2008 (GLOBE NEWSWIRE) -- The law firm of Spector Roseman Kodroff & Willis, P.C. announces that a securities class action lawsuit was commenced in the United States District Court for the Central District of California, on behalf of purchasers of the securities of SouthWest Water Company ("SouthWest Water" or the "Company") (Nasdaq:SWWC) between May 10, 2005 through November 7, 2008, inclusive (the "Class Period").
SouthWest Water provides operations, maintenance and management services, including water production, treatment and distribution, wastewater collection and treatment, customer service, and utility infrastructure construction management. The Company owns regulated public utilities and also serves cities, utility districts and private companies under contract. The Complaint alleges that throughout the Class Period, defendants knew or recklessly disregarded that their public statements were materially false and misleading or failed to disclose the following: (1) that the Company was improperly applying a rate of depreciation for certain acquired assets by failing to consider the length of time the assets were in service prior to being acquired; (2) that the Company was improperly capitalizing and depreciating costs associated with installing water and sewer taps in Texas and Mississippi while recognizing the related tap fee revenue when received, instead of expensing the costs as incurred and recognizing the related revenue in the period the tap was actually installed; (3) that depreciation expense related to assets acquired since 2000 had been understated on the Company's consolidated financial statements, expenses related to the installation of water and sewer taps in Texas and Mississippi had been understated, and certain assets and related depreciation were overstated; and (4) that, as a result of the foregoing, the Company misstated its financial results during the Class Period and its financial results were not prepared in accordance with Generally Accepted Accounting Principles.
On November 10, 2008, SouthWest Water shocked investors when it announced that the Company would be delaying the filing of its Form 10-Q for the third quarter ended September 30, 2008. The Company revealed that the Board's audit committee had concluded that the consolidated financial statements for the years ended December 31, 2005, 2006 and 2007, as well as for the quarters ended March 31, 2008 and June 30, 2008, should no longer be relied upon and would be restated to correct a number of errors related to: (1) the establishment of the rate of depreciation of assets acquired by acquisition; and (2) the accounting for revenues and related costs associated with the installation of water and sewer taps. The Company further disclosed that it would correct the errors in its consolidated financial statements. On this news, shares of SouthWest Water declined $2.97 per share, more than 36 percent, to close on November 10, 2008, at $5.25 per share, on unusually heavy volume.
If you purchased SouthWest securities during the Class Period, you may, no later than January 26, 2009, move to be appointed as a Lead Plaintiff in this class action. A Lead Plaintiff is a representative, chosen by the Court, which acts on behalf of other class members in directing the litigation. The Private Securities Litigation Reform Act of 1995 directs Courts to assume that the class member(s) with the "largest financial interest" in the outcome of the case will best serve the class in this capacity. Courts have discretion in determining which class member(s) have the "largest financial interest," and have appointed Lead Plaintiffs with substantial losses in both absolute terms and as a percentage of their net worth.
If you have sustained substantial losses in SouthWest securities during the Class Period, please contact Spector Roseman Kodroff & Willis, P.C. at classaction@srkw-law.com for a more thorough explanation of the Lead Plaintiff selection process. If you have relatively small losses, your ability to participate in any recovery will be protected by the Lead Plaintiff(s), and you need take no affirmative steps at this time. If you wish to join this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel Robert M. Roseman or David Felderman toll-free at 888-844-5862 or e-mail classaction@srkw-law.com. For more detailed information about the firm please visit its website at http://www.srkw-law.com.
Spector Roseman Kodroff & Willis, P.C., with offices in Philadelphia, Pennsylvania and Washington, D.C., concentrates its practice in complex litigation including actions dealing with securities laws, antitrust, contract and commercial claims. The firm is active in major litigation pending in federal and state courts throughout the United States. The firm's reputation for excellence has been recognized on repeated occasions by courts which have appointed the firm as lead counsel in numerous major class actions involving violations of the federal securities laws and the federal antitrust laws, and consumer fraud. As a result of the efforts of the firm, and its members, hundreds of millions of dollars have been recovered through judgments and settlements on behalf of thousands of defrauded shareholders and companies.
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