PHILADELPHIA, Oct. 18, 2002 (PRIMEZONE) -- The law firm of Spector, Roseman & Kodroff, P.C. announces that a class action lawsuit was filed in the United States District Court for the Northern District of Texas, Dallas Division, against defendants TXU Corporation ("TXU" or the "Company") (NYSE:TXU), and certain of its officers and directors, on behalf of purchasers of the stock of TXU during the period from January 31, 2002 through October 11, 2002, inclusive (the "Class Period").
The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. Specifically, the lawsuit claims that the defendants artificially inflated the Company's stock price by misrepresenting the condition of TXU's European operations throughout the Class Period. The complaint alleges that TXU lacked a reasonable basis for its earning projections for fiscal 2002 and 2003. Specifically, the defendants failed to disclose to investors that: (1) TXU's operations in Europe and, specifically, those in the United Kingdom were plagued with deficient, inadequate, and faulty internal and financial controls; (2) TXU's risk management in Europe was virtually non-existent, and there was no means of addressing the risk to TXU from the UK's unregulated electricity market; (3) at least one credit facility worth approximately $500 million contained "cross-default" provisions between TXU Europe and TXU; (4) TXU's UK operations used wholesale electricity "structured transactions" to meet earnings goals in violation of Generally Accepted Accounting Principles by shifting earnings and profits from one quarterly period to another; (5) the Company's UK operations had entered into and carried long-term electricity purchase contracts that were "out of the money" by some $700 million; and (6) European operations were impaired and overvalued by billions of dollars.
On October 4, 2002, the Company announced that it was revising its earnings expectations for fiscal 2002 and 2003. TXU's stock plummeted as a result of this disclosure and subsequent negative disclosure in an October 7, 2002 analyst meeting, falling from a close of $32.90 per share on October 3, 2002 to $13.85 on October 8, 2002.
If you purchased TXU securities during the Class Period, you may, no later than December 13, 2002 move to be appointed as a Lead Plaintiff in this class action. A Lead Plaintiff is a representative, chosen by the Court, that acts on behalf of other class members in directing the litigation. The Private Securities Litigation Reform Act of 1995 directs Courts to assume that the class member(s) with the "largest financial interest" in the outcome of the case will best serve the class in this capacity. Courts have discretion in determining which class member(s) have the "largest financial interest," and have appointed Lead Plaintiffs with substantial losses in both absolute terms and as a percentage of their net worth. If you have sustained substantial losses in TXU securities during the Class Period, please contact Spector, Roseman & Kodroff, P.C. at classaction@srk-law.com for a more thorough explanation of the Lead Plaintiff selection process. If you have relatively small losses, your ability to participate in any recovery will be protected by the Lead Plaintiff(s), and you need take no affirmative steps at this time.
To join this action online, please visit http://www.srk-law.com/dbjoinaclassaction.asp. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel Robert M. Roseman toll-free at 888-844-5862 or via E-mail at classaction@srk-law.com. For more detailed information about the firm please visit its website at http://www.srk-law.com.
Spector, Roseman & Kodroff, P.C., located in Philadelphia, Pennsylvania and San Diego, California, concentrates its practice in complex litigation including actions dealing with securities laws, antitrust, contract and commercial claims. The firm is active in major litigation pending in federal and state courts throughout the United States. The firm's reputation for excellence has been recognized on repeated occasions by courts which have appointed the firm as lead counsel in numerous major class actions involving violations of the federal securities laws and the federal antitrust laws, and consumer fraud. As a result of the efforts of the firm, and its members, hundreds of millions of dollars have been recovered on behalf of thousands of defrauded shareholders and companies.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.