The U.S. District Court for the Western District of North Carolina dismissed a consolidated class action lawsuit against Duke Energy that alleged breach of fiduciary duty related to the company’s retirement savings plan and the impact on Duke Energy common stock by the company’s disclosure of 89 round-trip gas and power trades.

Chief Judge Graham C. Mullen granted the Charlotte-based energy company’s motion to dismiss the six claims by current and former employees and participants on the retirement savings plan.

The plaintiffs alleged that Duke breached its fiduciary duty because it should have concluded its common stock was a bad investment because Duke shares had been artificially inflated by the effects of the company’s round trip trading.

On May 17, 2002, Duke Energy issued a press release to investors, including employee investors, announcing that it had analyzed its trades from 1999 through 2001 to identify any sell/buy back trades. The release said that the round trip trades accounted for less than 1% of the company’s annual trading and marketing revenues. The company’s stock subsequently fell to $20/share from $34.70/share.

The company told the Securities and Exchange Commission later that month that it identified 89 round trip trades conducted between Jan. 1, 1999 and June 30, 2002, and that the revenues from the trades totaled $217 million and were recorded in 2001 and the first two quarters of 2002. Over that period the company’s total revenues were $75.6 billion.

“This court concludes that the misrepresentation of revenues by the inclusion of the 89 round trip transactions representing less than one third of one percent of Duke Energy’s revenues is immaterial as a matter of law,” the court’s order stated.

In January, a U.S. District Court judge for the Southern District of New York dismissed 13 claims consolidated in a class-action case there related to allegations Duke overstated revenue through round-trip trading. Duke has two remaining complaints against it related to round-trip trading. They are also filed in U.S. District Court in Charlotte.

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