NEW YORK, Aug. 17, 2015 /PRNewswire/ -- Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) has filed a class action suit against Centrais Eletricas Brasileiras SA ("Eletrobras" or the "Company") (NYSE: EBR), and certain of its executives, that alleges violations of the Securities Exchange Act of 1934 on behalf of the City of Providence, Rhode Island, individually, and all others similarly situated who purchased Eletrobras' publicly traded securities during the period August 17, 2010 through June 24, 2015, inclusive (the "Class Period") (collectively, the "Class").
The case is pending in the United States District Court for the Southern District of New York. A copy of the Complaint may be obtained from Kaplan Fox's website, or from the Court.
The Complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements to investors concerning the award of contracts for multi-billion dollar construction projects controlled by Eletrobras and its subsidiaries.
The Complaint alleges that, throughout the Class Period Eletrobras made assurances of its commitment to "[m]aking corporate decisions based on the principles of ethics, transparency, integrity, loyalty, impartiality, legality and efficiency," while, unbeknownst to investors, "the Company was engaged in an illegal scheme whereby billions of dollars paid by the Company to third parties, ostensibly for construction and services contracts, were being diverted to Eletrobras' executives and to political parties associated with the Company's management." Specifically, throughout the Class Period, "Defendants held themselves out as refusing any form of corruption, bribery or kickback and making decisions transparently based on ethical principles, but failed to disclose, among other things, that: (1) the Company and Individual Defendants were engaged in a massive bribery and corruption scheme operating in direct contradiction to the publicly-available policies set forth in the Company's Code of Ethics and other corporate governance directives, (2) there were serious irregularities with respect to the costs of contracts that Eletrobras entered into for the construction of projects, including Angra 3, Belo Monte and Jirau, (3) a substantial amount of the contracts the Company awarded were the product of bid-rigging that materially inflated the costs of contracts, (4) the Company's financial statements were materially false and misleading and not presented in accordance with International Financial Reporting Standards, and (5) the Company had material deficiencies in its internal controls over its financial reporting."
The Complaint further alleges that on April 30, 2015 before the markets opened for trading, "Eletrobras filed a notice on Form NT 20-F with the SEC disclosing that the Company would be unable to file its Annual Report on Form 20-F for the year ended December 31, 2014 by April 30, 2015, the prescribed date for the Form 20-F filing. The Company gave two reasons for the delay. First, Eletrobras disclosed that the auditor of a significant affiliate of Eletrobras, Energia Sustentável do Brasil Participações S.A. (the affiliate operating Jirau), had informed the Company that it did not consider itself independent under the relevant U.S. independence rules and that a new auditor had been appointed to audit the financial statements of Jirau for purposes of applying equity method accounting. Second, as a result of press reports in relation to Operation Car Wash that the consortium of companies bidding for the mechanical assembly of the Angra 3 power plant allegedly made illegal payments to the CEO of Eletrobras' wholly owned subsidiary, Eletronuclear, the CEO of Eletronuclear (Pinheiro da Silva) requested a leave of absence." A separate SEC filing also disclosed that although the Company's internal investigation had not yet concluded, the Board of Directors had approved the engagement of a 'specialized and independent entity to conduct an investigation to ensure transparency and independence.'" On April 30, 2015, Eletrobras' ADSs declined by 8.24% to close at $2.45 per ADS.
If you are a member of the proposed Class, you may move the court no later than September 21, 2015 to serve as a lead plaintiff for the Class. You need not seek to become a lead plaintiff in order to share in any possible recovery.
For more information about Kaplan Fox & Kilsheimer LLP, or to review a copy of the Complaint filed in this action, you may contact Kaplan Fox.
If you have any questions about this Notice, the action, your rights, or your interests, please contact:
Donald R. Hall Pamela A. Mayer KAPLAN FOX & KILSHEIMER LLP 850 Third Avenue, 14th Floor New York, New York 10022 (800) 290-1952 (212) 687-1980 Fax: (212) 687-7714 E-mail address: firstname.lastname@example.org; email@example.com
Laurence D. King KAPLAN FOX & KILSHEIMER LLP 350 Sansome Street, Suite 400 San Francisco, California 94104 Telephone: (415) 772-4700 Fax: 415-772-4707 E-mail address: firstname.lastname@example.org
SOURCE Kaplan Fox & Kilsheimer LLP