CMS Energy
In early January 2007, CMS Energy, a Jackson-based company, announced that it would pay out US$200 million to settle securities class action lawsuits related to trading fraud from 2000 to 2002.
CMS Energy was involved in round-trip energy trades where one of its Houston-based operations made false statements about its business. CMS procured electricity from other energy companies at a fixed price and then sold it back to them at the same price. This type of controversial trading was made famous by the Enron scandal.
In May 2002, CMS Energy revealed it participated in 13 round-trip energy trades with Houston energy companies, Dynegy Inc. and Reliant Resource Inc., between May 2000 and December 2001. These transactions reportedly led CMS to declare US$5.3 billion in false revenue.
When it was discovered, CMS was forced to restate its financial figures and shut down its Houston arm.
A final settlement agreement is expected to be approved by the federal court and concluded by the end of March 2007.
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