BOSTON, July 23, 2004 (PRIMEZONE) -- An investor sued The Shaw Group, Inc. ("Shaw" or the "Company") (NYSE:SGR) today, claiming the company and three top officers misled the investing public about its finances.
Berman DeValerio Pease Tabacco Burt & Pucillo (www.bermanesq.com) filed the class action in the U.S. District Court for the Eastern District of Louisiana. The lawsuit seeks damages for violations of federal securities laws on behalf of all investors who bought Shaw common stock from October 19, 2000, through and including June 10, 2004 (the "Class Period").
To receive a copy of the complaint, you may contact the court, call the firm at (800) 516-9926 or go to http://www.bermanesq.com/pdf/ShawGroup-Cplt.pdf.
The lawsuit claims that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder, including U.S. Securities and Exchange Commission ("SEC") Rule 10b-5.
The complaint names as defendants: Shaw; J.M. Bernhard Jr., who is the Company's chairman and chief executive officer; Tim Barfield, Jr., who has been the Company's president, chief operating officer, and director since 2003; and Robert L. Belk, who is Shaw's chief financial officer and executive vice president.
The complaint alleges that, during the Class Period, Shaw issued materially false and misleading information about its financial performance to the investing public.
Specifically, the lawsuit alleges that Shaw established excessive or "general" contract reserves in conjunction with two acquisitions and then tapped those "cookie jar" reserves to artificially boost its earnings when needed. Defendants also prematurely recognized revenue in connection with its long-term construction contracts, violating its own reported revenue recognition policy. These actions violated Generally Accepted Accounting Practices and resulted in significantly overstated revenues and net income throughout the Class Period, which in turn inflated Shaw's stock price.
The Company took advantage of the artificially inflated stock price by offering $479 million in shares of Shaw common stock to the public, as well as millions of dollars of debt securities. Company insiders also took advantage of the inflated price by selling approximately 1.94 million shares of Shaw common stock during the Class Period, for proceeds of roughly $80 million.
After the close of trading on June 10, 2004, the Company shocked the investing public by announcing that Shaw was the subject of an informal investigation by the SEC into the Company's method of accounting for acquisitions.
In response to these revelations, the price of Shaw's common stock plummeted, falling 18% to $10.05 when trading resumed on June 14, 2004 (following a long weekend).
If you purchased Shaw common stock from October 19, 2000, through and including June 10, 2004, you may wish to contact the following attorney at Berman DeValerio Pease Tabacco Burt & Pucillo to discuss your rights and interests.
Joseph C. Merschman, Esq. One Liberty Square Boston, MA 02109 (800) 516-9926 law@bermanesq.com
If you wish to apply to be lead plaintiff in this action, a motion on your behalf must be filed with the court no later than August 16, 2004. You may contact the attorneys at Berman DeValerio to discuss your rights regarding the appointment of lead plaintiff and your interest in the class action, or you may submit information online at http://www.bermanesq.com/Securities/Signup1.asp?caseid=517. Please note, you may also retain counsel of your choice and need not take any action at this time to be a class member.
Berman DeValerio Pease Tabacco Burt & Pucillo prosecutes class actions nationwide on behalf of institutions and individuals, chiefly victims of securities fraud, antitrust law violations, and consumer fraud. The firm consists of 31 attorneys in Boston, San Francisco and West Palm Beach, Florida.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca