Stockholders v Gexa Corporation
Gexa Corp Misstated Revenues
Several class actions have been filed against electric utility Gexa Corporation (OTC:GEXC.OB) and certain of its officers and directors by stockholders who purchased the company's common stock between August 14, 2003, and March 30, 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 lawsuits allege that, throughout the applicable period, the defendants materially overstated Gexa's financial results in connection with its power delivery business. On March 30, 2004, after the market closed, the company issued a press release which admitted that its previously reported revenues had been overstated estimates, rather than measurable earned revenues based upon power delivered to customers or proceeds from energy sales as previously reported. The defendants also revealed that, in connection with the completion of the audit for fiscal year 2003, the company's independent auditors identified certain material weaknesses in Gexa's systems of internal controls. Because of the admissions contained in this press release, Gexa stock dropped more than 25%, falling from a closing price of $6.64 per share on March 30, 2004, to a closing price of $4.90 per share on March 31, 2004.
If you purchased securities issued by Gexa during the applicable period, you may request appointment by the court as a lead plaintiff if you do so by October 4, 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 you in this action, or you may choose to do nothing, and remain in the class as a silent member.
