Another Enron-era firm recieved its commuppence this past week. Energy industry firm, Dynegy restated earnings by $300 million in 2002 and saw its stock price drop by 95%. The firm previously settled with the SEC to "resolve charges brought by the Securities and Exchange Commission related to the transactions.

One Dynegy executive is already serving a 24 year prison term for his role in perpetuating the firm's alleged fraudulent financial practices that uber-shareholder attorney William Lerach says led to the company overstating its earnings:

"Dynegy engaged in some of the same types of off-balance-sheet transactions that Enron did, and when the whole thing got exposed, its stock plummeted," said William S. Lerach, lead attorney for the shareholders. "They engaged in secret transactions to artificially boost cash flow."

Dynegy has agreeed to a settlment totaling $468 million. Additionally, the company has agreed to allow the plaintiffs to appoint ttwo members to the Dynegy board. Also, Citigroup, Inc., which was involved in some of the questionable trnasactions giving rise to the shareholder suit, as agreed to contribute $5 million to the settlement.

The Washington Post has further details.

-- MDT

Labels: Enron