PHILADELPHIA, Nov. 7, 2002 (PRIMEZONE) -- Law Offices Bernard M. Gross, P.C. filed a class action lawsuit on November 6, 2002, in the United States District Court for the Southern District of New York, on behalf of all persons and entities who purchased or otherwise acquired the securities of Allegheny Energy, Inc. (NYSE:AYE) ("Allegheny Energy" or the "Company") between April 23, 2001 and October 8, 2002, inclusive (the "Class Period").
The action, numbered 02-CV-8838, is pending in the United States District Court, Southern District of New York, located at 500 Pearl Street, New York, New York, against defendants Allegheny Energy, Inc., Alan J. Noia, Michael P. Morrell, Bruce E. Walenczyk, and Daniel L. Cordon. The Honorable Kevin Thomas Duffy is presiding over the case. A copy of the Complaint is available from the Court or the Law Offices Bernard M. Gross, P.C. Please contact us by phone at 866-561-3600 (toll free) or by E-mail at susang@bernardmgross.com.
The complaint charges Allegheny Energy, Alan J. Noia, Chairman, President and Chief Executive Officer, Michael P. Morrell, Senior vice President of Allegheny and President of subsidiary Allegheny Energy Supply, Bruce E. Walenczyk, Senior Vice President and Chief Financial Officer, and Daniel L. Gordon, President of Allegheny Energy Supply's energy trading division with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5, by issuing a series of materially false and misleading statements to the market during the Class Period.
Specifically, the complaint alleges that on March 16, 2001, Allegheny Energy's subsidiary Allegheny Energy Supply Company, LLC ("Allegheny Energy Supply") announced that it completed its acquisition of Global Energy Markets ("G.E.M.") from Merrill Lynch & Co., Inc. ("Merrill Lynch"). The Complaint alleges that Allegheny Energy made false and misleading statements during the Class Period in that it omitted to state that its revenues (and revenue guidance) materially depended, on illusory, revenue creating, "wash transaction" with Enron, and other deceptive energy trading practices.
On September 25, 2002, the Company sued Merrill Lynch for fraud and breach of contract related to the G.E.M. acquisition. In that lawsuit, Allegheny Energy alleged that it overpaid for G.E.M. because the unit's financial reports had been inflated by shams trades involving Enron. The Company admitted that G.E.M. engaged in a significant amount of wash or round trip energy trades with Enron, and perhaps others. The Company further admitted that the effect of those trades was to artificially inflate revenues, trading volumes and growth rate.
The Company's September 25, 2002 admissions set a chain of events in motion, which would result in the Company's stock's tumble from a high of $12.85 on September 25, 2002 to $3.80 on October 8, 2002 -- a drop of $9.05, or 70%. On October 1, 2002, Moody's downgraded Allegheny Energy's credit to junk status. The Company, in a press release, reassured investors that this would not trigger any default or prepayment of the firm's debt. A week later, on October 8, 2002, the Company announced that it was in technical default under its credit agreements.
Plaintiff seeks to recover damages on behalf of Class members and is represented by the law firm of Law Offices Bernard M. Gross, P.C. which has significant experience and expertise in prosecuting class actions. Law Offices Bernard M. Gross P.C. has recently filed the following cases:
LEAD PLAINTIFF
PURCHASED CLASS PERIOD
COMPANY SYMBOL DURING FILING DEADLINE
Cigna Corp CI-NYSE 05/02/01 - 10/24/02 12/24/02
Cutter &
Buck, Inc. CBUKE-NASDAQ 06/23/00 - 08/12/02 11/12/02
Electronic Data
Systems Corp. EDS-NYSE 09/07/99 - 09/24/02 11/25/02
Nui Corp. NUI-NYSE 11/08/01 - 10/17/02 12/30/02
Sears S-NYSE 01/07/02 - 10/17/02 12/17/02
If you bought the securities of Allegheny Energy between April 23, 2001 and October 8, 2002, you may, no later than December 20, 2002, move the Court to serve as lead certain legal requirements. If you wish to discuss this action or have any questions concerning this Notice or rights or interests with respect to these matters,
PLEASE CONTACT: Law Offices Bernard M. Gross, P.C.
Deborah R. Gross, Esquire
Susan R. Gross, Esquire
1515 Locust Street, Second Floor
Philadelphia, PA 19102
Telephone: 866-561-3600 (toll-free)
or 215-561-3600
E-mail: susang@bernardmgross.com or
Debbie@bernardmgross.com
Website: http://www.bernardmgross.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca