NEW YORK- LAWFUEL – The Law News Network -Feb. 24, 2006–The law firm of Milberg Weiss Bershad & Schulman LLP announces that it has filed a class action lawsuit today on behalf of all persons who purchased or otherwise acquired the securities of Chicago Bridge & Iron Company N.V. (“CBI” or the “Company”) (NYSE: CBI), between March 9, 2005 and February 15, 2006, inclusive, (the “Class Period”), seeking to pursue remedies under the Securities Exchange Act of 1934 (the “Exchange Act”). A copy of the complaint filed in this action is available from the Court, or can be viewed on Milberg Weiss’s website at: http://www.milbergweiss.com
If you purchased the securities of CBI between March 9, 2005 and February 15, 2006, inclusive, and sustained damages, you may, no later than April 18, 2006 request that the Court appoint you as lead plaintiff. 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 the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as “lead plaintiff.” Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Milberg Weiss Bershad & Schulman LLP, or other counsel of your choice, to serve as your counsel in this action.
The action, Civil Action number 06-cv-1532, is pending in the United States District Court for the Southern District of New York against defendants CBI, Gerald M. Glenn (former President, CEO and Chairman), Richard E. Goodrich (Executive VP and CFO), and Robert B. Jordan (former Executive VP and COO). According to the complaint, defendants violated sections 10(b) and 20(a) of the Exchange Act, and Rule 10b-5, by issuing a series of material misrepresentations to the market during the Class Period.
The complaint alleges that CBI is a global engineering, procurement, and construction company. According to the complaint, the Company repeatedly reported in filings with the SEC and in publicly disseminated press releases strong financial results and “record backlog” of construction projects that would generate significant revenues and contribute to the Company’s continuing growth. Unbeknownst to investors, however, these statements were materially false and misleading, and knowingly or recklessly disregarded by defendants as such, because defendants failed to disclose that the Company’s purportedly positive results and guidance were the result of, in material part, fraudulent accounting. The truth began to emerge on October 26, 2005. On that day, the Company announced that it would not be able to timely file its report for the third quarter of 2005 with the SEC. In reaction to this news, the price of CBI stock fell $6.21 per share in a single day. On October 31, 2005, the Company revealed in a press release that the delay in releasing its results for the third quarter of 2005 “was precipitated by a memo from a senior member of CB&I’s accounting department alleging accounting improprieties, including the determination of claim recognition on two projects and the assessment of costs to complete two projects.” According to the release, the Company’s Audit Committee had commenced an independent investigation of the matter. Despite this announcement, defendant Gerald Glenn, maintained a positive outlook for the Company’s performance. On January 27, 2006, the Company disclosed in a filing with the SEC that it had entered into a lucrative “Stay Bonus Agreement” with the Company’s Vice President and Controller, Tommy Rhodes, valued at over $1.74 million, in an apparent attempt to cover up its previously announced “accounting improprieties” and to silence a potential whistle-blower. On February 3, 2006, as further evidence that CBI’s problems were much more serious than defendants had suggested at the time, the Company announced, without explanation, that it had fired defendants Glenn and Robert B. Jordan. In reaction to this news, the price of CBI stock plummeted, falling to $22.33 per share, or 23%, on February 4, 2006, from its closing price of $29.00 on February 3, 2006. On February 15, 2006, the last day of the Class Period, the Company announced that it was slashing its earnings guidance for fiscal 2005 to between $0.40 to $0.50 per share, well below its previous guidance of $0.90 to $0.93 per share. In addition, the Company revealed that it was in “communication with the SEC in regard to developments in the Audit Committee investigation.” On the same day, February 15, 2006, the Company hosted a conference call during which Philip Asherman, the Company’s new President and CEO, stated that “nearly two-thirds of the guidance adjustment announced today (was) a result of further erosion of earnings on two of (the) projects” identified in October 2005 by defendants. In addition, Asherman conceded that the Company had identified certain internal control “issues,” including controls related to the Company’s forecasting, stating that “clearly there is an opportunity to correct identified weaknesses in our controls. . .” In reaction to this news, the price of CBI stock fell another $0.77 to close at $22.95 on February 14, 2006. Defendants were motivated to engage in the unlawful and fraudulent scheme in order for Company insiders, including defendants Glenn, Goodrich, and Jordan, to sell over 715,837 shares of their personally-held CBI shares during the Class Period for proceeds of more than $30.8 million.
Milberg Weiss Bershad & Schulman LLP (http://www.milbergweiss.com) is a firm with over 100 lawyers with offices in New York City, Los Angeles, Boca Raton, Delaware, and Washington D.C. and is active in major litigations pending in federal and state courts throughout the United States. Milberg Weiss has taken a leading role in many important actions on behalf of defrauded investors, consumers, and others for nearly 40 years. Please contact the Milberg Weiss website for more information about the firm. If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following attorneys: