NEW YORK, June 4, 2002 (PRIMEZONE) -- A class action complaint has been filed in the United States District Court for the Southern District of Texas- Houston Division, case number 02-CIV-2133, on behalf of all persons or entities who purchased Dynegy, Inc. ("Dynegy" or the "Company") securities (NYSE:DYN) between April 17, 2001 and April 24, 2002, both dates inclusive (the "Class Period"). Dynegy, Charles L. Watson, Robert D. Doty, and Stephen W. Bergstrom are named as defendants in the action.
The complaint charges Dynegy and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that Dynegy and its top officers inflated the price of the Company's stock in order to sell almost $500 million in stock to the investing public. Defendants knew that concealing Dynegy's true vehicle, Project Alpha, for creating cash flow from operations and the true impact it would have on the Company provided the only way that they could foster the perception in the business community that Dynegy was not "Enron Corp.," i.e., the only way Dynegy could post the revenue and earnings per share growth claimed by defendants.
Prior to the Class Period, the Individual Defendants realized that many of their complicated deals to generate reported net income did not generate cash flow. The defendants knew that investors would eventually discover this discrepancy and the Company's stock price would collapse. To prevent this, Dynegy classified what was essentially a loan from CitiGroup, Inc. as an operating activity rather than as a financing activity as required by Generally Accepted Accounting Principles. The defendants' wrongful course of business (i) artificially inflated the price of Dynegy's stock during the Class Period; (ii) deceived the investing public, including plaintiff and other Class members, into acquiring Dynegy's securities at artificially inflated prices; (iii) allowed the Individual Defendants to extract millions of dollars in bonuses for creating the appearance of the Company's phenomenal cash flow from operations growth; and (iv) allowed Dynegy to sell nearly half a billion dollars of its own securities to the unsuspecting public.
Plaintiffs are represented by the law firm of Rabin & Peckel LLP. Rabin & Peckel LLP and its predecessor firms have devoted its practice to shareholder class actions and complex commercial litigation for more than thirty years and have recovered hundreds of millions of dollars for shareholders in class actions throughout the United States. You can learn more information about Rabin & Peckel LLP at www.rabinlaw.com.
If you purchased Dynegy securities during the Class Period described above, you may, no later than June 25, 2002, move the Court to serve as lead plaintiff. To serve as lead plaintiff, however, you must meet certain legal requirements. You can join this action as a lead plaintiff online at www.rabinlaw.com. If you wish to discuss this action further or have any questions concerning this announcement, or your rights or interests, please contact plaintiff's counsel, Eric Belfi or Sharon Lee, Rabin & Peckel LLP, 275 Madison Avenue, New York, NY 10016, by telephone at (800) 497-8076 or (212) 682-1818, by facsimile at (212) 682-1892, or by e-mail at email@rabinlaw.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.