Wolf Haldenstein Adler Freeman & Herz LLP today filed a class action lawsuit in the United States District Court, Southern District of Texas, on behalf of all persons who purchased master limited partnership units of Linn Energy LLC (“Linn” or the “Company”) [NASDAQ:LINE] between February 24, 2011 and July 1, 2013, inclusive (the “Class Period”), against the Company and certain of the Company’s officers and directors, alleging securities fraud pursuant to Sections 10(b) and 20(a) of the Exchange Act [15 U.S.C. §§ 78j(b) and 78t(a)] and Rule 10b-5 promulgated thereunder by the SEC [17 C.F.R. § 240.10b-5] (the “Class”).
The case name is Catherine A. Fisher Trustee U/A DTD May 29, 1993 Catherine A. Fisher Trust v. Linn Energy LLC, et al., Civil Action No. 13-cv-02125. A copy of the complaint filed in this action is available from the Court, or can be viewed on the Wolf Haldenstein Adler Freeman & Herz LLP website at www.whafh.com.
The Complaint alleges that during the Class Period, the Company issued materially misleading statements and omissions in its press releases, Securities and Exchange Commission (“SEC”) filings and other public statements, which were endorsed and approved by the Company’s Chief Executive Officer Mark E. Ellis, Chief Financial Officer Kolja Rockov and Chief Accounting Officer David B. Rottino. The complaint explains how Linn enticed investors into purchasing the Company’s units through its use of non-Generally Accepted Accounting Principles (“GAAP”) accounting measures and concealment of material information concerning the effect of the Company’s actual capital expenditures and derivative investment costs on its distributable cash flow. As the Complaint alleges, the Company’s use of non-GAAP measures enabled it to entice investors with its unduly high and unsustainable distributable cash flow.
On June 4, 2013, the Company filed a Form S-4/A with the SEC in connection with its proposed acquisition of Berry Petroleum Company (“Berry”). Buried within this filing, the Company disclosed for the first time some of the actual costs associated with its derivative hedging strategy. This previously undisclosed information confirmed earlier reports by Barron’s that the Company was overstating its distributable cash flow figures and had been misleading investors.