CHICAGO, Aug. 13, 2002 (PRIMEZONE) -- Much Shelist Freed Denenberg Ament & Rubenstein, P.C. has filed a class action lawsuit against Xcel Energy, Inc. ("Xcel" or the "Company") (NYSE:XEL), and certain officers and directors in the United States District Court for the District of Minnesota. The shareholder lawsuit is on behalf of all persons and entities who purchased the securities of Xcel during the period January 31, 2001 through July 26, 2002, inclusive (the "Class Period").
The lawsuit alleges that Xcel, James J. Howard, its Chairman of the Board of Directors, Wayne H. Brunetti, its President and Chief Executive Officer, and Edward J. McIntyre, its Vice President and Chief Financial Officer, violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market. These alleged misstatements had the effect of artificially inflating the price of Xcel securities.
If you wish to discuss your rights and interests, or if you have information relevant to the lawsuit, you may contact Carol V. Gilden or Michael E. Moskovitz at Much Shelist Freed Denenberg Ament & Rubenstein, P.C., by calling a toll-free number 1-800-470-6824, or by sending an e-mail to investorhelp@muchshelist.com. Your e-mail should refer to Xcel.
Specifically, the Complaint alleges that Defendants misled the public by failing to disclose or by misrepresenting the following adverse facts during the Class Period:
-- Xcel had engaged in "round trip" or "wash" transactions -- simultaneous energy trades in the same amount and price that yielded no economic benefit to the Company;
-- Xcel and its unregulated energy trading subsidiary, NRG Energy, Inc. had entered into credit agreements with lenders that had cross-default provisions and covenants, such that, in the event of a default by NRG, Xcel would lose access to $800 million in credit;
-- Xcel's management lacked a coherent plan to remedy NRG's credit and liquidity difficulties; and
-- Xcel lacked internal controls to adequately monitor the trading of its power.
After the market closed on July 25, 2002, Xcel issued a press release announcing its financial results for the quarter ending June 30, 2002. Xcel disclosed that its earnings had declined precipitously on NRG's exposure to the energy trading market and that its full-year earnings would miss expectations. Xcel further revealed that it had received subpoenas from both the Commodities Futures Trading Commission and the Securities and Exchange Commission relating to its "round trip trades" in electricity and natural gas.
In a conference call the next day, management disclosed the extent of Xcel's liquidity crisis. Analysts were horrified to learn that the liquidity and credit crisis extended to Xcel itself under the "cross-collateral default" provisions. Later that day S&P cut NRG's credit rating to junk status. By the end of trading on June 26, 2002, Xcel's common stock had suffered a one-day, 36% plunge to close at 7.55 per share.
Plaintiff seeks to recover damages on behalf of all those who purchased Xcel securities during the Class Period. If you purchased Xcel securities during the Class Period and either lost money on the transactions or still hold the securities, you may, if you meet certain other legal requirements, file a motion to serve as a lead plaintiff. You must file your motion no later than September 30, 2002.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. The requirements for serving as a lead plaintiff are set forth in the Private Securities Litigation Reform Act of 1995 (15 U.S.C. Section 78u-4).
Much Shelist's history is one of experience, leadership and results. For more than 25 years, Much Shelist has represented plaintiffs in class action litigation in federal and state courts across the United States. The firm has successfully prosecuted cases involving securities fraud, antitrust violations, consumer fraud, unlawful business practices and insurance company fraud. Under Much Shelist's leadership, class members have obtained judgments and settlements in excess of $4 billion.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca