NEW YORK, Dec. 24, 2008 (GLOBE NEWSWIRE) -- Pomerantz Haudek Block Grossman & Gross LLP (www.pomerantzlaw.com) ("Pomerantz") has filed a class action lawsuit in the United States District Court, Central District of California, against SouthWest Water Company ("Southwest Water" or the "Company") (Nasdaq:SWWC). The class action was filed on behalf of purchasers of the securities of the Company between May 10, 2006 and November 7, 2008, inclusive (the "Class Period"). The Complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Ace and Rule 10b-5 promulgated thereunder.
SouthWest Water is a provider of water, wastewater, and public works services. The Company owns regulated public utilities and also serves cities, utility district and private companies under contract. The Complaint alleges that, throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose: (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; (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 ("GAAP"); (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, the Company revealed that its 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 and June 2008, should no longer be relied upon and would be restated. On this news, shares of SouthWest Water declined $2.97 per share, more than 36%, to close at $5.25 per share.
If you purchased shares of SouthWest Water during the Class Period, you have until January 26, 2009 to ask the Court to appoint you as lead plaintiff for the class. Lead plaintiffs must meet certain legal requirements. Shareholders outside the United States may join the action. If you wish to review a copy of the Complaint, to discuss this action, or have any questions, please contact Teresa L. Webb (tlwebb@pomlaw.com) of the Pomerantz Firm at 888.476.6529 (or 888.4-POMLAW), toll free. Those who inquire by e-mail are encouraged to include their mailing address and telephone number.
The Pomerantz Firm, which has offices in New York, Chicago, Washington, D.C., Columbus, Ohio and the San Francisco Bay area, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 70 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members.