Investor lawsuit against Horizon Line

Investor lawsuit against Horizon Line A class action lawsuit on behalf of investors was filed on Dec. 31 in federal district court in Delaware against the Jones Act carrier Horizon Lines and five of its executives, including Chief Executive Officer Charles “Chuck” Raymond.
   The suit alleges the company deceived investors and 'fraudulently inflated Horizon's securities prices by entering into illegal price-fixing agreements with competitors in order to manipulate the prices for Puerto Rico freight services.'
   In addition to Raymond, the suit names four other former Horizon Lines employees. They are former Chief Financial Officer Mark Urbania, who resigned from his job effective April 4, 2008; Gabriel Serra, former senior vice president for Horizon's Puerto Rico division; R. Kevin Gill, a former vice president responsible for marketing Horizon's Puerto Rico service; and Gregory Glova, former marketing and pricing director for Horizon’s Puerto Rico division.
   In October, Serra, Gill, and Glova all pleaded guilty, were fined
$20,000, and agreed to serve jail terms under agreements reached with the U.S. Justice Department. The Justice Department said at the time they were 'the first charges in the Antitrust Division's ongoing investigation into collusion in the coastal shipping industry.'
   The class action suit filed this week was done so on behalf of the City of Roseville, Michigan Employees' Retirement System, and other similarly situated investors who purchased stock between March 2, 2007 and April 25, 2008, but the suit says 'there are hundreds or thousands of members in the proposed class.'
   During that time, Horizon's stock traded for as much as $35 per share ' in the past year it has traded as low as $1.95 and closed Friday at $3.49.
   The suit asks for a jury trial and compensatory damages.
   The complaint relies heavily on the company's quarterly earnings statements, press releases, and comments made during telephone calls with stock analysts, as well as the lawsuit filed by the Justice Department against the former Horizon executives in an attempt to support its allegations that Horizon 'made false and/or misleading statements, as well as failed to disclose material adverse facts about the company’s business, operations, and prospects.'
   In a statement, Horizon said it “is unable to predict the outcome of the lawsuit; however, the Company believes that it has appropriate disclosure practices and intends to vigorously defend against the lawsuit.”
   In October, when the three executives pleaded guilty, Horizon said it would 'cooperate fully with the Department of Justice as it moves forward with its investigation' of the Jones Act trades.
   The Justice Department investigation has sparked dozens of civil lawsuits by shippers against Horizon and other Jones Act carriers, including Sea Star, Crowley, Matson Navigation and Trailer Bridge, which participate in the Puerto Rico or other domestic trades. ' Chris Dupin