NEW YORK, May 17, 2002 (PRIMEZONE)-- Pomerantz Haudek Block Grossman & Gross LLP (www.pomerantzlaw.com) has filed or is investigating the following class action suits on behalf of purchasers of the following securities: Reliant Energy, Inc. (NYSE:REI); Reliant Resources, Inc. (NYSE:RRI); CMS Energy Corp. (NYSE:CMS); and against Merrill Lynch (NYSE:MER) on behalf of purchasers of Excite@Home (Nasdaq:ATHQE), for the following Class Periods:
Reliant Energy, Inc. (NYSE:REI), and Reliant Resources, Inc. (NYSE: "RRI") Reliant Energy, Inc. and Reliant Resources, Inc. (the "Reliant Companies") issued false and misleading statements regarding its financial results, during the period May 14, 1999 through May 9, 2002 (the "Class Period"). On May 10 and May 13, 2002, defendants disclosed that the Reliant Companies had artificially inflated its revenue during the Class Period by using "round trip" trades, i.e. the simultaneous purchase and sale of energy that created the illusion of transactional revenues.
CMS Energy Corp. (NYSE:CMS)
CMS Energy Corp. ("CMS") issued false and misleading statements regarding its financial results during the period August 3, 2000 through May 15, 2002, (the "Class Period"). Defendants have disclosed that during the Class Period, CMS artificially inflated its revenues using "round trip" trades, i.e. the simultaneous purchase and sale of energy that created the illusion of transactional revenues. CMS also announced that the Securities and Exchange Commission is conducting an inquiry of these transactions. On May 16, 2002, CMS announced the resignation of Tamela W. Pallas, President and CEO of CMS' energy marketing unit, CMS Marketing, Services and Trading Co., (CMS-MST).
Merrill Lynch (NYSE:MER) on behalf of purchasers of Excite@Home (Nasdaq:ATHQE)
From August 18, 1999 through June 20, 2001, (the "Class Period") Merrill Lynch & Co., Inc. and its former Internet research analyst Henry M. Blodget issued research reports and ratings on Excite that were neither independent not objective, but instead were biased and improperly influenced by Merrill Lynch's lucrative investment banking business relationships with this important client. Also, unbeknownst to the investing public, Merrill Lynch's research analysts' compensation was tied to, in part, on their contributions to the firm's investment banking business. Plaintiff further charges that Merrill Lynch issued positive ratings and coverage about Excite, while concealing defendants' contemporaneous, private negative assessments about this client. For example, defendants repeatedly issued an Accumulate/Buy rating on Excite despite Blodget's internal conclusion that this stock was a "piece of crap," had a "flat" outlook and was without any "real catalysts" for improvement. Similarly, when defendants were publicly rating Excite an Accumulate/Accumulate, Blodget was privately telling his colleagues that the Company was "falling apart" and he "doesn't think there's any reason to buy more." Plaintiff additionally asserts that defendants failed to disclose that although Merrill Lynch technically had five ratings, it had a policy and practice of issuing only its top three ratings (buy, accumulate, and neutral) to Internet companies. During the relevant time herein, defendants never issued its two lowest ratings -reduce or sell- on such companies, including Excite. As a result of defendants' false and misleading statements, the market price of Excite common stock was artificially inflated, maintained or stabilized during the Class Period.
On April 8, 2002, New York State Attorney General Eliot Spitzer (the "Attorney General") announced that a ten-month investigation had revealed that Merrill Lynch's "supposedly independent and objective investment advice was tainted and biased by the desire to aid Merrill Lynch's investment banking business." Merrill Lynch's ratings on Excite were among those challenged by the Attorney General. Since then, the Attorney General has reportedly reached an interim settlement with Merrill Lynch requiring it to make more meaningful disclosures of its investment banking relationships with companies on which it issues research reports, but larger issues relating to possible payment of restitution and even criminal charges are still unresolved. The Securities and Exchange Commission and certain states have now announced their own investigations against Merrill Lynch.
If you purchased the common stock of Reliance Energy, Inc., Reliance Resources, Inc., CMS Energy Corp., or Excite @Home during their respective Class Period and wish to discuss these actions 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. Please Contact: Andrew G. Tolan, Esq. of Pomerantz Haudek Block Grossman & Gross LLP, 888-476-6529 ((888) 4-POMLAW) or agtolan@pomlaw.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca