Stockholders v AES Corporation (2003)
Investors Claim AES Corporation Manipulated California Energy Market
The class has been certified in several consolidated class actions filed against energy utility AES Corporation (NYSE:AES) and certain of its officers and directors by stockholders who purchased the company's common stock, including those who engaged in option transactions concerning AES securities, between July 27, 2000, and November 8, 2002. The actions claim that the defendants violated federal securities laws by issuing a series of material misrepresentations regarding the California energy market 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 specified time period, AES and others were manipulating California's electricity market by illegally withholding supply, causing prices for electricity in California to skyrocket. AES's reported revenues from its sale of electric power were allegedly inflated, in part, from its role in manipulating the energy market and were not sustainable. Because the market manipulation was illicit, AES is now exposed to substantial contingent legal liabilities.
The present action differs from other actions against AES which alleged violations of federal securities laws arising from misrepresentations in connection with the United Kingdom energy market. Those actions originally asserted claims arising from the adoption by the United Kingdom of a new framework for the pricing of energy that exerted downward pressure on prices and adversely affected the company's ability to be profitable in the UK, particularly in connection with AES' Fifoots Point Power Plant in Wales, which began operations during the Spring of 2001.
If you purchased or otherwise acquired AES common stock during the applicable period, you are automatically a member of the class. To assure that the attorneys for the class have current records regarding you, it is advisable that you contact them.
