A class action lawsuit has been filed in the United States District Court for the Northern District of California on behalf of persons who acquired securities of Mirant Corporation (NYSE:MIR) (formerly known as "Southern Energy Company") between January 19, 2001 and May 6, 2002, inclusive (the "Class Period").
The complaint alleges that Mirant and certain of its officers violated the federal securities laws by artificially inflating the price of the Company's stock through their actions and statements. Plaintiffs allege that defendants schemed to manipulate the supply and price of electricity in the wholesale electricity market, as alleged in a lawsuit filed against the Company by the State of California and other legal actions. As a result of defendants' manipulation, Mirant reported quarter after quarter of outstanding growth and positive financial results during the Class Period. Defendants also made materially false and misleading statements regarding the Company's financial condition and business, including assuring investors that financial issues related to the California energy market had been properly accounted for.
The complaint alleges that defendants' manipulation allowed the Company to complete a lucrative secondary stock offering in December 2001 and a $750 million convertible debenture offering in May 2001. In addition, defendants reaped over $8 million by selling Mirant stock at artificially inflated prices during the Class Period. Since its Class Period high of $47, the price of Mirant stock has lost over 80% of its value.
The complaint alleges that as a result of the defendants' conduct, plaintiff and other members of the Class suffered damages by purchasing the stock at artificially inflated prices.