NEW YORK, June 17, 2004 – LAWFUEL -The law firm of Milberg Weiss Bershad & Schulman LLP announces that a class action lawsuit was filed on June 16, 2004 on behalf of purchasers of the securities of The Shaw Group, Inc. (“Shaw” or the “Company”) (NYSE: SGR) between October 19, 2000 and June 10, 2004, 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
The action, numbered 04-1685, is pending in the United States District Court for the Eastern District of Louisiana against defendants Shaw, Tim Barfield Jr., J.M. Bernhard, Jr., Richard F. Gill and Robert Belk.
Shaw describes itself as a provider of complete piping systems and comprehensive engineering procurement and construction services to the power industry. The complaint alleges that, during the Class Period, defendants’ publicly disseminated results of Shaw’s operations and financial condition contained artificially inflated earnings and revenues, assets and income. Such results were not prepared or reported in accordance with Generally Accepted Accounting Principles and deceived investors as to the Company’s true performance, thereby artificially inflating the price of Shaw securities during the Class Period. Specifically, the complaint alleges that the defendants artificially inflated the Company’s reported revenues and earnings by improperly establishing and drawing on reserve accounts established in connection with a series of large acquisitions, including the acquisition of Stone & Webster Inc. in July 2000 and the acquisition of The IT Group in May 2002. The complaint further alleges that defendants prematurely recognized revenue in violation of Shaw’s own purported policies and Generally Accepted Accounting Principles, and that defendants failed to disclose the extent to which Shaw was vulnerable to changes in power generation market conditions.
The truth emerged after the market closed on June 10, 2004 when Shaw announced that it had been notified by the SEC that the SEC was conducting an inquiry that appeared to focus on the Company’s accounting for acquisitions. On this news, Shaw stock, which had traded at a class period high of $62.37, fell 12.4% from a closing price of $12.28 on June 10, 2004 to a closing price of $10.75 on the next trading day (June 14, 2004) on more than four times normal volume. During the class period, Company insiders sold Shaw shares at prices artificially inflated by defendants’ materially false and misleading statements, for proceeds in excess of $80 million. Additionally, during the Class Period, Shaw sold $490 million convertible zero coupon, liquid yield option notes.
If you bought the securities of Shaw between October 19, 2000 and June 10, 2004, inclusive, and sustained damages, you may, no later than August 16, 2004, 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.
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, Seattle 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: