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Independent Energy Faces Class Action

Independent Energy Faces Class Action

Independent Energy Holdings PLC, an electric generating and electric marketing company, has found itself the target of a federal class action lawsuit for stock fraud brought by the company's shareholders, according to law firm Berman DeValerio & Pease LLP.

The lawsuit filed in the District Court for the southern district of New York claims the defendants issued "false and misleading information" pertaining to the UK-based company's financial and operating conditions.

The suit seeks damages for violations of federal securities laws on behalf of anyone who purchased American depository shares of Independent Energy between Feb. 12, 2000 and Sept. 8, 2000. During this class period, the complaint alleges that the defendant misrepresented the extent of its problems with respect to billing its sub-100 kW electricity customers.

The suit claims that Independent Energy continually assured investors that its billing problems were only bill timing problems, but at the end of the class period, the company revealed there were also accounting and collection errors. On Aug. 11 of this year, Independent Energy announced that due to these problems, its financial results for the year ending June 30, 2000 would be below analysts' estimates. As a result, the company said it would delay reporting its results, and on Sept. 8, the London Stock Exchange and Nasdaq suspended its trading.

Alex Steis

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