NEW YORK, May 16, 2002 (PRIMEZONE) -- Pomerantz Haudek Block Grossman & Gross LLP (www.pomerantzlaw.com) has filed a class action lawsuit against Dynegy, Inc. ("Dynegy" or the "Company") (NYSE:DYN) and four of the Company's senior officers on behalf of investors who purchased the common stock of Dynegy during the period between April 1, 2001 and April 24, 2002, inclusive (the "Class Period"). The case was filed in the United States District Court for the Southern District of Texas under Index Number H-02-1816.
The Complaint alleges that Dynegy, one of the world's leading energy traders, and four of the Company's senior officers, violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing materially false and misleading financial statements concerning the Company's cash flow from operations. In particular, the Company omitted to state material information in those financial statements that were necessary to make such statements not misleading.
As alleged in the Complaint, Defendants entered into a series of secret financial transactions with shell corporations, referred to as "Project Alpha," which were actually disguised loan transactions, and which were used to artificially inflate Dynegy's reported cash flow operations by $300 million for the year 2001. Defendants' misuse of these transactions to inflate its reported cash flow from operations was a serious violation of Generally Accepted Accounting Principles ("GAAP").
On April 25, 2002, prior to the market's opening, Dynegy shocked the investing community by announcing that after consultation with the staff of the Securities and Exchange Commission ("SEC"), the Company would file an amended Form 10-K for the year ended December 31, 2001, reducing operating cash flow from $811 million to $511 million, a decrease of approximately 37%. These disclosures caused the Company's stock to plummet nearly 30% by the end of trading on April 25, 2002.
If you purchased the common stock of Dynegy during the Class Period, you have until June 25, 2002 to ask the Court to appoint you as one of the lead plaintiffs for the Class. In order to serve as lead plaintiff, you must meet certain legal requirements. If you wish to review a copy of the Complaint, to discuss this action or have any questions, please contact Andrew G. Tolan, Esq. of the Pomerantz firm at 888-476-6529 (or (888) 4-POMLAW), toll free, or at agtolan@pomlaw.com by e-mail. 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 and Chicago, 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 50 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.