UhZTED STATES DISTRTCT COURT
SOUTEERN DXSTRXCT OF TEXAS
HOUSTON DIVISION
m
FERN LERNE'R, lndkidually and onBebtiof all )
Others Similarly Situated,
Pkhe
) CLASS ACTION COiklP~
vs. ) FORVTOLATTONS OF
) FEDERAL SECUmS L4Wi
RELLWT RESOURCES, INC., R Sll3'E > .
llAl3lBErnR STEVEN Iv. NAEVE andMARY P. )
RICCLARDELLO, ) JCJRVTlUALDEMANbED
Dehbb. - )
>
)
CLASS ACTION COMPLAINT
TO `ME HONCUUBLE'~ STATES DISTRICT COURT JUDGE:
Plainahas alleged tie foIIowing based upon the investigatio,n ofPMntB's counsel, tich
included &review of U&d States Securities and&change Commission ("SEC"`) us
Resauws, `Inc. ("Reliant Resources" or ti "Cornpa@`), as well as sedatory slings and reports,
securities analysts reports and* advisories about the Company, press releases and' other public
sktemems issued by&e Company, and mediarqorts about the Company9 and PlaintiBslieves that
subWal additional evidmtiary support will e&t for t21e allegations set. forth
reasonable opporruniq for discowy.
1. This is a federal `class action on behalf of pwcbasers of ti sectities of
m
Resources betweenMBy 1,200 1 to May l&2002, inclusive (the Tlass Period"), seeking to pursue
remedies under the Securities Exchange Act of 1934 (the "`adaage A&).
JURISDICTION AND VENUE
2. The ishims asserted herein arise under and pmuaat to Sectiam 10(b) and N(a) of
SNIPPETS:
Plainahas alleged tie foIIowing based upon the investigatio,n ofPMntB's counsel, tich
Resauws, `Inc. ("Reliant Resources" or ti "Cornpa@`), as well as sedatory slings and reports,
This is a federal `class action on behalf of pwcbasers of ti sectities of Reliant
remedies under the Securities Exchange Act of 1934.
rnatially fslse aad misleading information, occurred in substantial part in this District and
Resources describes itself as a provider of "electrici~ and energy services to wholesale and
During the Class Period, the Individual Defendants, as the senior executive officers
Resources, its operations, dunces, fknciial conditioa, present and future business prospecs-
As a senior executive officer and a direotor and as a controlling person of a publiclytraded
Resources to obtain f&orable financi& for the strpte+ a,@sition of Orion Power &ldingq IV.
offexing price of $3 0 pm share, rqxdtig in net proceeds to Reliant Resources of
reMed risk management services ta our customers.
sell a potion of the capacity of our domestic Eacilties unde-r fixedprice sale contracts,
and ti&ded the following disclosure in Note 6 to its audited financial statemsnts.
these TracEug Derivatives arc recorded at fair v&u?
earnings per share of $0.51, driven primarily by &ong results km
These included the $33 million gaia mentioned above, a gain of $3 miUion from the cumuhiive
designated and qtiify as cash flow hedges was immaterial.
expected to be reclasstiedinto net income
accounting for cerkn transactions as cash now hedges in its conventional accrual accounts did
meet alI ofthe criteria for hedge accounting set out k Statement of Financial Accounting
fiscal year ended December 3 I I 200 1, representig thad: Reliant Resources had revenues of
accountabili~ to prospectke investors and the public in general (FASB Statements of Concepts
Reliant &sources was followed by several securities analysts employed by
Reliant Resources and the IndividuaI Defendants, individualIy and inoonccrt, dire&y
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