NEW YORK, May 17, 2013 (GLOBE NEWSWIRE) -- Pomerantz Grossman Hufford Dahlstrom & Gross LLP has filed a class action lawsuit against Magnum Hunter Resources Corp. ("MHR" or the "Company") (NYSE:MHR) and certain of its officers. The class action filed in United States District Court, Southern District of Texas, and docketed under 13-cv-01166, is on behalf of a class consisting of all persons or entities who purchased or otherwise acquired securities of MHR between May 3, 2012 and April 16, 2013, both dates inclusive (the "Class Period"). This class action seeks to recover damages against the Company and certain of its officers and directors as a result of alleged violations of the federal securities laws pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
If you are a shareholder who purchased MHR securities during the Class Period, you have until June 24, 2013 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll free, x237. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and number of shares purchased.
MHR is an independent exploration and production company engaged in the acquisition, development and production of crude oil, natural gas and natural gas liquids, primarily in West Virginia, Kentucky, Ohio, Texas, North Dakota and Saskatchewan, Canada. The Company is active in five of the unconventional shale resource locations in North America, namely the Marcellus Shale, Utica Shale, Eagle Ford Shale, Pearsall Shale and Williston Basin/Bakken Shale.
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 that: (1) errors existed in the Company's financial reporting practices relating to: Property Accounting and Transfers of Unproved Properties, Oil and Gas Reserves, Income Taxes, Accounting regarding MHP, Prior Period Restatements, Ability to Meet Debt Covenants, Capitalized Interest, Assets Held for Sale; (2) the Company lacked adequate internal and financial controls, including issues relating to: Effective Control Environment to Meet the Company's Growth, Financial Reporting, Leasehold Property Costs, Complex Accounting Issues and Miscellaneous Internal Control Deficiencies; and (3) as a result of the foregoing, the Company's statements were materially false and misleading at all relevant times.
On March 18, 2013, MHR announced that it would delay filing its annual report on Form 10-K for the year ended December 31, 2012. The Company attributed its delay to the discovery of "certain material weaknesses in its internal controls over financial reporting."
On April 16, 2013, MHR announced that the Company had dismissed PricewaterhouseCoopers LLP ("PWC") as the Company's independent registered public auditor effective immediately. PWC, according to MHR, had identified certain issues in the Company's financial reporting, including: (i) that information had come to PWC's attention which if further investigated may have a material impact on the fairness or reliability of Company's consolidated financial statements, and this information was not further investigated and resolved to PWC's satisfaction prior to its dismissal, and (ii) the need to significantly expand the scope of PWC's audit of the Company's consolidated financial statements for the fiscal year ended December 31, 2012.
MHR further reported that, "PWC believe[s] that internal controls necessary for the Company to develop reliable financial statements did not exist, and therefore, PWC significantly expanded the scope of its audit of the Company's consolidated financial statements for the fiscal year ended December 31, 2012 for purposes of completing such audit." On this news, the Company's shares declined $0.49 per share, or over 14.5%, to close on April 17, 2013, at $2.83 per share.
The Pomerantz Firm, with offices in New York, Chicago, Florida, and San Diego, 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. See www.pomerantzlaw.com.