SAN DIEGO and CALGARY, Alberta, Aug. 6, 2014 /PRNewswire/ -- Shareholder rights law firm Robbins Arroyo LLP announces that an investor of Penn West Petroleum Ltd. (NYSE: PWE) has filed a federal securities fraud class action complaint in the U.S. District Court for the Southern District of New York. The complaint alleges that the company and certain of its officers and directors violated the Securities Exchange Act of 1934 between May 4, 2012 and July 29, 2014 (the "Class Period"). Penn West operates as an exploration and production company that acquires, explores, develops, exploits, and holds interests in petroleum and natural gas properties and related assets in western Canada.
Penn West Is Accused of Lacking Proper Internal Financial Controls
According to the complaint, on July 30, 2014, shares of Penn West dropped more than 14% to close at $7.85 following the company's July 29, 2014 disclosure that it was conducting an internal review of its accounting practices and further anticipated some of its historical financial statements would need to be restated. The review currently pertains to 2014 and the four previous fiscal years. Specifically, the Penn West press release notes that operating expenses for fiscal years 2012 and 2013 totaling $111 million and $70 million respectively, were reclassified to property, plant, and equipment as capital expenditures without adequate support. Moreover, for each of the fiscal years 2012 and 2013, the audit committee identified approximately $100 million in operating expenses that were incorrectly reclassified as royalty expenses. Other areas of review include the income statement classification of certain costs and credits and the timing of certain accruals relating to production, operating costs, and capital.
The complaint further alleges that Penn West made false and/or misleading statements and failed to disclose that: (i) the company's financial statements contained errors related to the improper classification of operating expenses causing an overstatement of capital expenditures; (ii) some additional operating expenses were incorrectly classified as royalty expenses; (iii) it lacked adequate international controls over financial reporting; and (iv) the company was not in compliance with certain of its covenants under its unsecured, revolving syndicated bank facility.
Penn West Investors Are Encouraged to Contact Shareholder Rights Law Firm Robbins Arroyo LLP
If you invested in Penn West and would like to discuss your shareholder rights, please contact attorney Darnell R. Donahue at (800) 350-6003, DDonahue@robbinsarroyo.com, or via the information form on the firm's shareholder rights blog: www.robbinsarroyo.com/shareholders-rights-blog/penn-west-petroleum-ltd
Robbins Arroyo LLP is a nationally recognized leader in securities litigation and shareholder rights law. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested.
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SOURCE Robbins Arroyo LLP