WASHINGTON, Nov. 14, 2002 (PRIMEZONE) -- The Law Office of Mark McNair announces a securities class action lawsuit has been filed against Allegheny Energy, Inc. (NYSE:AYE). The complaint is on behalf of, and seeks damages for, shareholders who purchased the stock from April 23, 2001 through October 8, 2002, inclusive (the "Class Period").
The suit alleges that AYE and certain of its officers violated the Securities Exchange Act of 1934, as a result of the defendants' issuance of false and misleading statements to the market during the Class Period.
The Complaint alleges that on March 16, 2001, Allegheny Energy acquired Global Energy Markets ("G.E.M."). It is alleged that before and after the acquisition, G.E.M. engaged in sham "wash" trades with Enron and other companies. On September 25, 2002 Allegheny Energy sued Merrill Lynch for fraud and breach of contract related to its G.E.M. acquisition. Allegheny charged that it overpaid for G.E.M. because its financial reports had been inflated by sham transactions involving Enron.
On October 1, 2002, Moody's downgraded Allegheny Energy's credit to junk status. The following day in a press release, the Company reassured investors that this would not trigger any default or prepayment of the firm's debt. However, a week later Allegheny Energy admitted it was in technical default under its credit agreements. Following this announcement the Company's stock price which had traded as high as $12.85 on September 25, 2002 staggered to $3.80 on October 8, 2002 -- a drop of $9.05, or 70%.
The Law Office of Mark McNair is currently investigating these claims. If you were a purchaser of AYE during the period indicated and want to discuss your legal rights or if you have information relevant to the lawsuit, you may e-mail or call the Law Office of Mark McNair. You may contact the Law Office of Mark McNair at 1101 30th Street N.W., Suite 500, Washington, D.C, 20007, by telephone at (877) 511.4717 or (202) 872.4717, or via e-mail at mcnair@justice4investors.com.
If you are a member of the Class, you may move the court no later than December 20, 2002 to serve as lead plaintiff for the Class. In order to serve as lead plaintiff, you must meet certain legal requirements. To be a member of the class you need not take any action at this time, and you may retain counsel of your choice.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.