NEW YORK, Dec. 9, 2008 (GLOBE NEWSWIRE) -- Kirby McInerney LLP announces that it has filed a class action lawsuit in the United States District Court for the Central District of California on behalf of all persons or entities who purchased or otherwise acquired the publicly traded securities of Southwest Water Company ("SouthWest Water" or the "Company") (Nasdaq:SWWC) between May 10, 2005 and November 7, 2008, inclusive, (the ''Class Period'').
The Complaint charges SouthWest Water and certain of its executive officers with violations of federal securities laws. Among other things, plaintiffs claim that defendants' material omissions and dissemination of materially false and misleading statements concerning the Company's business, operations and prospects, caused SouthWest Water's stock price to become artificially inflated, inflicting damages on investors. SouthWest Water provides water, wastewater and public works services.
The Complaint alleges that throughout the Class Period defendants knew or recklessly disregarded that their public statements were materially false and misleading. Specifically, the Complaint alleges that defendants' public statements were false and misleading or failed to disclose or indicate the following: (1) that in regard to certain acquired assets, the Company was improperly applying a rate of depreciation for financial reporting purposes that did not 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 but 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, as a result of the above, depreciation expense related to assets acquired by acquisition 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; (4) that as such, the Company misstated its financial results during the Class Period; (5) that the Company's financial results were not prepared in accordance with Generally Accepted Accounting Principles; (6) that the Company lacked adequate internal and financial controls; and (7) that as a result of the above, the Company's financial statements were materially false and misleading at all relevant times.
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 SouthWest Water's audit committee had concluded that the consolidated financial statements for the years ended December 31, 2005, 2006 and 2007, and for each of the quarters therein, 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 disclosed that it would correct the errors in its consolidated financial statements to bring them into alignment with its rate filings. On this news, shares of SouthWest Water declined $2.97 per share, more than 36%, to close on November 10, 2008, at $5.25 per share, on unusually heavy volume.
If you are a member of the class, you may, no later than January 26, 2009, request that the Court appoint you as lead plaintiff of the class. Although your ability to share in any recovery is not affected by the decision whether or not to seek appointment as a lead plaintiff, lead plaintiffs can participate in important decisions which could affect the recovery for class members.
If you wish to discuss this action, or have any questions concerning this notice or your rights, please contact us, toll free, at (888) 529-4787 or by email at info.newcases@kmllp.com
Kirby McInerney LLP has specialized in complex litigation, including securities class actions, for several decades. The firm has repeatedly demonstrated its expertise in this field, and has been recognized by various courts which have appointed the firm to major positions in consolidated and multi-district litigation. The firm's efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling hundreds of millions of dollars, and the firm's achievements and quality of service have been chronicled in numerous published decisions. More information about the firm, class actions in general, or about the role of the lead plaintiffs in a securities class action can be obtained through Kirby McInerney LLP's website at http://www.kmllp.com