Several class actions have been filed against onshore oil well services company Key Energy Services, Inc., (NYSE:KEG) and certain of its officers and directors by stockholders who purchased the company's common stock between April 29, 2003, and June 4, 2004. The actions claim that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock.

The action alleges that during the applicable period, the defendants violated Generally Accepted Accounting Principles and deceived investors as to Key Energy’s true performance. Key’s press releases regarding operations and financial condition allegedly contained artificially inflated revenues, assets and income throughout the period.

On March 15, 2004, Key Energy announced that that it would not meet the Securities and Exchange Commission deadline for filing its annual report because it had yet to complete its review of “certain idle equipment” with a book value of $55 million, and that the review might result in a revision to its 2003 earnings. The company maintained, however, that, “the underlying fundamentals of the [c]ompany are strong and the outlook remains positive.” The next two months were punctuated by a series of additional disclosures, each of which further depressed Key’s stock price. On June 7, 2004, before the market opened, the defendants announced that they were withdrawing all previous earnings forecasts of operating results for 2004 in light of then-current uncertainties affecting the company. At that time, they also announced that the company had received notice from the indenture trustee of its 6.375% and 8.375% senior notes that Key Energy was in default and had 90 days to cure the default. On this news, share prices plummeted on extremely high trading volume of 13,963,900 shares. Key shares had closed at $9.62 on June 4, 2004. On June 7, 2004, they reached an intra-day low of $7.00, down 27%, before rebounding to close the day at $8.67.

If you purchased securities issued by Key Energy during the applicable period, you may request appointment by the court as a lead plaintiff if you do so by August 10, 2004. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that your claim is typical of the claims of other class members, and that you will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiffs. Your ability to share in any recovery is not affected by the decision whether or not to serve as a lead plaintiff. You may retain any counsel of your choice to serve as you in this action, or you may choose to do nothing, and remain in the class as a silent member.