HOUSTON, March 11, 2004 (PRIMEZONE) -- Berman DeValerio today advised investors affected by its stock fraud lawsuit against El Paso Corporation (NYSE:EP) that El Paso now expects to be forced to issue a financial restatement.
In a March 10 announcement, El Paso said it would likely have to restate earlier financials to account for a reduction of its estimated oil and natural gas reserves, a claim at the heart of the class action filed by the firm. The company also said that it would delay the release of its fourth quarter 2003 earnings, pending the completion of a review of the impact of its reserves revision.
Berman DeValerio Pease Tabacco Burt & Pucillo (http:www.bermanesq.com) filed the class action February 24, 2004 in the U.S. District Court for the Southern District of Texas. It seeks damages for violations of federal securities laws on behalf of all investors who bought El Paso common stock from March 31, 2003 through and including February 17, 2004 (the "Class Period").
Berman DeValerio has represented investors in class actions since 1982. 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/Securities/CasePage.asp?caseid=501.
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 the company; Ronald L. Kuehn, Jr., former chairman and chief executive officer; Douglas L. Foshee, current president and chief executive officer; and D. Dwight Scott, executive vice president and chief financial officer.
According to the complaint, the defendants materially misrepresented El Paso's financial condition during the Class Period, causing the company's stock to trade at artificially high prices.
Specifically, El Paso reported strong proved global oil and natural gas reserves. Proved reserves are defined as those that can be extracted from known fields under existing economic and operating conditions and represent a key metric in assessing an oil company's future growth.
All along, however, El Paso's seemingly strong financial prospects were the direct result of the defendants having artificially inflated the company's proved reserves and, correspondingly, its potential future revenue stream, the lawsuit says.
The truth about El Paso's finances began to emerge after the markets closed on February 17, 2004. The company shocked the investing public by announcing that an independent review of the company's proved oil and gas reserves revealed that, as of January 1, 2003, El Paso overstated such reserves by a staggering 41%, or 3.64 trillion cubic feet. The company further revealed that, as a direct result, it expects to take a pre-tax charge of approximately $1 billion for the fourth quarter of fiscal year 2004.
On the heels of these revelations, El Paso's common stock fell 17.6% from a closing price of $8.81 on February 17, 2004 to a close of $7.26 on February 18, 2004.
If you purchased El Paso Corporation common stock during the period of March 31, 2003 through and including February 17, 2004, you may wish to contact the following attorneys at Berman DeValerio Pease Tabacco Burt & Pucillo to discuss your rights and interests.
Bryan A. Wood, Esq.
Jeffrey C. Block, 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 must be filed on your behalf with the court no later than April 19, 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=501. 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 34 attorneys in Boston, San Francisco, and West Palm Beach, Fla.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca