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Case Status:    SETTLED
On or around 01/03/2005 (Date of order of final judgment)

Filing Date: August 08, 2003

On January 3, 2005, the Court entered the Orders awarding lead class plaintiffs' counsel's attorneys' fees and reimbursement of expenses and approving the plan of allocation. The Court further entered the Final Judgment and Order of Case Dismissal With Prejudice signed by U.S. District Judge James S. Gwin. The case is closed.

According to a filing with the Securities and Exchange Commission from July 2004, FirstEnergy Corporation reached an agreement to pay $89.9 million to settle this class action lawsuit. Its insurance carrier will pay $71.92 million. The company will pay the remaining $17.98 million. The company defendant said the agreement didn't amount to an admission of wrongdoing. The settlement is subject to court approval.

On December 9, 2003, the Court entered an Order consolidating the actions under the caption In re: FirstEnergy Securities Litigation, Case No. 5:03CV01684. The Court appointed lead plaintiff approved their choice of lead counsel. On January 23, 2004, an Amended Complaint was filed, and the defendants soon after filed a motion to dismiss the Plaintiffs' Consolidated Complaint. On May 3, 2004, the Court entered the Order denying the defendants' motion to dismiss as to all claims except the claim brought under Sec. 12(a)(2). The Sec. 12(a)(2) claim was dismissed without prejudice for lack of standing. Further, on June 24, 2004, Court issued an Order denying defendants' motion for reconsideration of the denial to dismiss plaintiffs' amended consolidated complaint. The plaintiffs soon after filed a Proposed Stipulation and Agreement of Settlement.

At least a dozen complaints were filed in U.S. District Court and Summit County Common Pleas Court within the last year against the company, its executives and directors by firms representing shareholders or debt holders. The various federal court securities lawsuits were consolidated, according to FirstEnergy, which said two similar lawsuits also were pending in state courts.

The original complaint alleges that the company misled shareholders and others about its profitability. The complaint alleges that FirstEnergy and certain of its officers and directors with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The Complaint alleges that defendants violated federal securities laws by issuing a series of material misrepresentations to the market during the Class Period, thereby artificially inflating the price of FirstEnergy securities.

More specifically, the complaint alleges that these statements were materially false and misleading because they failed to disclose and misrepresented the following adverse facts, among others: (1) that the Company had materially overstated its earnings, revenues, net income, and earnings per share; (2) that the Company was improperly accounting for its annual amortization expenses by using all transition revenues recorded on all regulatory books rather using only the portion of transition revenue that corresponded to transition costs to determine the appropriate amortization; (3) that the Company was improperly accounting for above-market leases; (4) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (5) that as a result, the value of the Company's net income and financial results were materially overstated at all relevant times. On August 5, 2003, the Company reported that it would have to restate its financial results for fiscal year 2002 and the first quarter of 2003 due to its improper accounting for its annual amortization expenses and for above-market leases. News of this shocked the market. Shares of FirstEnergy fell 8.5 percent to close at $31.33 per share on extremely heaving trading volume.


Sector: Utilities
Industry: Electric Utilities
Headquarters: United States


Ticker Symbol: FE
Company Market: New York SE
Market Status: Public (Listed)

About the Company & Securities Data

"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: N.D. Ohio
DOCKET #: 03-CV-01684
JUDGE: Hon. Lesley Wells
DATE FILED: 08/08/2003
CLASS PERIOD END: 08/05/2003
  1. Abbey Gardy, LLP (New York)
  2. Berger & Montague PC
  3. Brodsky & Smith, LLC (former Pennysylvania)
  4. Cauley Geller Bowman Coates & Rudman, LLP (New York)
  5. Federman & Sherwood (Oklahoma City)
  6. Landskroner - Grieco, Ltd.
  7. Law Offices of Charles J. Piven, P.A.
  8. Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA)
  9. Schiffrin & Barroway LLP
  10. Seeger Weiss LLP (New York Old Address)
  11. Spector, Roseman & Kodroff (Philadelphia)
  12. Wolf Haldenstein Adler Freeman & Herz LLP (New York)
  13. Zwerling, Schachter, Zwerling & Koppell LLP
No Document Title Filing Date
COURT: N.D. Ohio
DOCKET #: 03-CV-01684
JUDGE: Hon. Lesley Wells
DATE FILED: 01/23/2004
CLASS PERIOD END: 08/19/2003
  1. Lerach Coughlin Stoia Geller Rudman & Robbins LLP (San Diego)
  2. Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA)
  3. Weisman, Kennedy & Berris Co., L.P.A.
No Document Title Filing Date
No Document Title Filing Date