On January 10, 2011, Duke Energy and Progress issued a joint press release announcing a merger agreement executed between Duke and Progress on January 8, 2011 (the “Merger Agreement”). The Merger Agreement was attached to the July 7, 2011 Prospectus Materials. The Merger Agreement clearly represented that “Duke’s Board of Directors shall cause [Mr. Johnson] to be appointed as the President and Chief Executive Officer of Duke.” The Prospectus Materials similarly represented that, after the Merger, “Mr. Johnson will serve as the president and chief executive officer of Duke Energy and Mr. Rogers will serve as the executive chairman of the board of directors of Duke Energy.” The July 7, 2011 Prospectus Materials omitted facts necessary to make the statements made therein not misleading, and was not prepared in accordance with applicable SEC rules and regulations. Specifically, the Registration Statement failed to disclose that: (i) Rogers, not Mr. Johnson, would serve as the CEO of the combined Company after the Merger; (ii) Defendants had obtained approval for the Merger from the Progress Board of Directors and shareholders by failing to disclose that Rogers would act as the CEO of the combined Company; and (iii) Defendants misled the North Carolina Utilities Commission (“NCUC”) and others to gain regulatory approval of the Merger by failing to timely disclose Mr. Johnson's ouster to the NCUC.
In addition, from May 4, 2012 through June 29, 2012, Duke Energy filed numerous Prospectus Updates on Forms 425 with the SEC which “urge[d] investors and shareholders to read the Registration Statement, including the joint proxy statement/prospectus that is a part of the Registration Statement…because they contain important information.” Defendants hence caused shareholders to rely upon the same Prospectus Materials that, during this same period, Defendants knew contained misleading statements and omitted material facts about Mr. Johnson's role as CEO of the combined Duke Energy. Defendants also failed to advise the Progress Board about their plan to oust Mr. Johnson upon consummation of the Merger. On July 3, 2012, Duke Energy issued a press release, in contradiction to previous representations, indicating that Rogers was appointed president and chief executive officer of the combined company and that Johnson resigned by mutual agreement. As a result of these disclosures, the price of Duke Energy common stock declined. For more information on the Duke Energy securities class litigation, click here.
About Lieff Cabraser
Lieff, Cabraser, Heimann & Bernstein, LLP, with offices in San Francisco, New York and Nashville, is a nationally recognized law firm committed to advancing the rights of investors and promoting corporate responsibility.
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