SouthWest Water Company
Practice Area: Securities FraudPerrin, et al. v. SouthWest Water Company
Cohen Milstein Sellers & Toll PLLC serves as co-lead counsel on behalf of investors in SouthWest Water Company (“SouthWest Water” or the “Company”). The complaint charges SouthWest Water and certain of its officers and directors with violations of the Securities Act of 1933 and the Securities Exchange Act of 1934. SouthWest Water provides operations, maintenance and management services, including water production, treatment and distribution, wastewater collection and treatment, customer service, and utility infrastructure construction management. The Company owns regulate public utilities and also serves cities, utility districts and private companies under contract.
The complaint alleges that Defendants’ public statements were false and misleading and/or failed to disclose that: (1) the Company had improperly accounted for the rate of depreciation of assets acquired by its acquisitions; (2) the Company had improperly accounted for revenues and related costs associated with the installation of water and sewer taps; (3) the Company’s financial statements were not prepared in accordance with Generally Accepted Accounting Principles (“GAAP”); (4) the Company lacked adequate internal and financial controls; and (5) as a result of the foregoing, the Company’s financial statements were materially false and misleading at all relevant times.
According to the complaint, on November 10, 2008, the Company shocked investors when it announced that its audit committee concluded that the Company’s financial statements for the years ended December 31, 2005, 2006 and 2007, and for each of the quarters therein, as well as for the quarters ended March 31, 2008 and June 30, 2008, should no longer be relied upon and would be restated. The complaint alleges that the errors that led to the restatement related to the establishment of the rate of depreciation of assets acquired by the Company through acquisitions, and in accounting for revenues and related costs associated with the installation of water and sewer taps. Following this news, the Company’s shares fell $2.97 per share, or more than 36 percent, to close on November 10, 2008 at $5.25 per share, on unusually heavy trading volume.
The briefing on Defendants’ motion to dismiss Lead Plaintiffs’ second consolidated amended class action complaint is fully briefed and awaiting decision by the Court.