Magnum Hunter Resources has securities class action lawsuit dismissed

An oil and gas exploration company recently announced that the securities class action lawsuit filed against it was recently dismissed.

Magnum Hunter Resources Corporation explained that the litigation, which was filed in 2013 in the U.S. District Court for the Southern District of New York, was dismissed on June 23, 2014. The litigation was the fifth of its kind against the company to be dismissed. Two of the lawsuits were dismissed by the plaintiffs who filed them, while the other three were due to actions by the company in the court.

"It is very gratifying that we have been successful in securing the dismissal of such a large number of lawsuits against our Company and certain directors and officers," said Paul Johnston, senior vice president and general counsel of Magnum Hunter Resources. "Fortunately, courts throughout the country are taking a much tougher stance on these types of complaints against companies and their directors and officers. We would like to also express our appreciation to the litigation team at Norton Rose Fulbright in Houston who led our efforts in all of these dismissals."

The plaintiffs in the case still have the ability to make an appeal on the ruling, and this would be done in the U.S. Court of Appeals for the Second Circuit. Magnum Hunter Resources plans to file Form 8-K with the Securities and Exchange Commission noting the dismissal of the lawsuit in the court.

Further lawsuit details
Law office Faruqi and Faruqi, LLP, noted that the class action lawsuit was filed in the court for those who acquired interests in Magnum Hunter Resources during the class period between Jan. 17, 2012 and April 22, 2013. The allegations in the case revolved around the company's business leaders violating federal securities laws.

Specific allegations noted in the filing were that the company's auditor PricewaterhouseCoopers, LLP, noted that Magnum Hunter Resources had a number of problems with its accounting controls. There also was a question as to whether or not the company's valuation was accurate, as well as if the oil and gas reserves were accounted for correctly. The company also was accused of not being compliant with its debt covenants.

Magnum Hunter Resources dismissed PwC as its auditor on April 16, 2013, and their issue was not solved during that time.