WASHINGTON, March 31 /PRNewswire/ -- Klafter & Olsen LLP announces that it has filed a class action complaint against Michael Baker Corporation ("Michael Baker" or the "Company") and certain of its officers in the U.S. District Court for the Western District of Pennsylvania on behalf of investors who purchased the common stock of Michael Baker between March 19, 2007 through February 22, 2008 (the "Class Period"). If you purchased Michael Baker's common stock during the Class Period, you have until May 12, 2008 to move to be appointed as a Lead Plaintiff. Klafter & Olsen LLP is continuing its previously announced investigation of claims against Michael Baker that could extend the class period back to August 15, 2006.
The Complaint charges Michael Baker certain of its officers with violations of the Securities Exchange Act of 1934. Specifically, the Complaint alleges that the defendants: (1) falsely reported Michael Baker's financial results for the fiscal year ended December 31, 2006 and the first three quarters of fiscal 2007; (2) falsely stated that the Company's financial statements were prepared in accordance with Generally Accepted Accounting Principles ("GAAP"); and (3) falsely stated that the Company had adequate internal and financial controls. As a result of the foregoing, the Company's financial statements were materially false and misleading at all relevant times.
After the close of the market on February 22, 2008, Michael Baker announced that it would be restating its previously issued financial statements for the first, second and third quarters of 2007, because of "errors" in those financial statements. According to the Company, the purported errors related primarily to the improper recognition of revenue on domestic managed services projects in the Company's Energy business segment during these periods. Among other things, as a result of the restatement, Michael Baker's previously reported net income of $18.0 million for the first nine months of 2007 was materially overstated by as much as $12.5 million. The Company also disclosed that it was still evaluating whether the false financial reporting would impact its previously issued audited consolidated financial statements for the year 2006.
Upon that announcement, shares of Michael Baker fell from its close of $36.10 on February 22, 2008 to $27.57 the next day of trading -- a drop of nearly 24% on extraordinary volume. The day before that announcement, Michael Baker announced Robert L. Shaw, was retiring as Michael Baker's CEO, effective that day.
Notably, this restatement is the second restatement announced by Michael Baker within the past three years. On August 15, 2006, Michael Baker had announced that a restatement involving the Company's previously issued financial results for fiscal years 2000 through 2004, and its related financial statements for each of the quarters of 2003 and 2004 and the first quarter of 2005, was "behind" it -- thereby suggesting that Michael Baker had adequate internal controls. The recently announced restatement casts doubt on that notion.
If you purchased Michael Baker's publicly traded securities during the period August 15, 2006 through February 22, 2008, please contact Klafter & Olsen LLP at http://www.klafterolsen.com/ or call us at 202/261-3553 for a more thorough explanation of the investigation and claims that have been asserted against Michael Baker.
Klafter & Olsen LLP has extensive expertise in prosecuting investor class actions involving financial fraud and has offices in Washington D.C. and New York. Please visit our website for more information about the Firm.
